Matt Calder

SLCC, Math 1210

Spring 2015

4-18-15

Pipeline Project

Mr. CEO,
I have finished my assessment of the Pipeline Project. Below you will find a description
of the methods used to minimize the cost of the project.
Route A: The cost of running the pipeline solely on BLM ground, first running west 5
miles, south 15 miles, and east 45 miles has a cost function of:
C(d) = 500,000(d)
This option runs a distance of 65 miles:
C(65) = 500,000(65) = 32,500,000
Route B: This route runs the pipeline 40 miles east through the mountain, and then south
15 miles. It has a cost function of:
C(d) = 500,000(d) + 5,000,000 = 500,000(55) + 5,000,000 = 32,500,000
Route C: For this route, we proposed to lay the pipeline in a direct line to the refinery. To
find the distance, we used the Pythagorean theorem. The theorem states that in a right
triangle, the hypotenuse equals the square root of the base squared plus the height
squared. The equation for this is:
(402 + 152) 42.72 miles
Because of the extra cost of laying pipe on private land, the cost function for this option
is:
C(d) = 850,000(d)
C(42.72) = 850,000(42.72) = 36,312,000
Route D: This option lays pipe south for 15 miles, and east for 40 miles. Again, because
there is an extra charge for laying pipe on private land, the cost function is:
C(d) = 500,000(d) + 5,250,000
C(d) = 500,000(55) + 5,250,000 = 32,750,000
Route E: To find the most optimal route, saving the most money, we must make a cost
function, find its derivative, and set it equal to 0. The cost function is involves finding
the optimal angle to lay the pipe across private land:
Tan = x/15
y2 = 152 + x2

y = (225 + x2)1/2
The cost function is therefore:
C(x) = 850,000(225 + x2)1/2 + 500,000(40-x)
The derivative of this cost function is:
C(x) = 425,000(225 + x2)-1/2 (2x) + 500,000(-1)
This simplifies to:
C(x) = 850,000x(225 + x2)-1/2 500,000
Now, after taking the derivative function and equaling it to 0, we find:
x = (22,500/189)
x 10.911
Plugging this into the Pythagorean equation:
y2 = 152 + (10.911)2
y = (152 + (10.911)2) 18.549
Now we plug 10.911 into the original cost function:
C(10.911) = 850,000(18.549) + 500,000(29.089) 30,311,150
Arctan 18.549/15 51.039 degrees
To minimize costs, we should lay pipe at 51.039 degrees southeast for 18.549 miles, then
east for 21.451 miles. This will be the most cost effective method for laying the pipeline.
I have drawn a diagram for each scenario in the following pages.

Route A
Total Mileage = 5+15+45 = 65 miles
Cost Per Mile = $500,000
Additional Costs = $0

65 miles $500,000
Route A Total Cost: $32,500,00

Route B
Total Mileage = 40 + 15 = 55 miles
Cost Per Mile = $500,000
Additional Costs = $3,500,000 Mountain Drilling +
$420,000 Impact Study +
$1,080,000 Delay Costs
(55 miles $500,000) + $5,000,000 Additional Costs
Route B Total Cost: $32,500,000

Route C
By Pythagorean theorem: a2 + b2 = c2, therefore
Total Mileage = (402 + 152) 42.72 miles
Cost Per Mile = $500,000 + Additional
Additional Costs = $350,000 per mile (Right of Way)
42.72 miles $850,000
Route C Total Cost: $36,312,000

Route D
Total Right of Way Mileage = 15 miles
Total BLM Mileage = 40 miles
Cost Per Mile = $500,000 + Additional
Additional Costs = $350,000 per mile (Right of Way)
(15 miles $850,000) + (40 miles $500,000)
Route D Total Cost: $32,750,000

Route E
Right of Way Mileage Cost = $850,000
BLM Mileage Cost = $500,000
Cost Function:
C(18.549) = 850,000(23.855) + 500,000(21.451)

Route E (contd)
Cost Function:
C(10.911) = 850,000(18.549) + 500,000(29.089)
Route E Total Cost = $30,311,150

Mr. CEO,
The above route has been optimized using a cost-permile function in order to keep costs at a minimum.
Route E is the lowest price option for this project. Let
me know what you decide and we can move forward.
Matt Calder