Planning for Performance
Capital Planning Tradeoffs in Excel
presented to
presented by
2016 AMPO Conference
Fort Worth, Texas
Cambridge Systematics, Inc.
October
27, 2016
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Joe Zissman
Outline
What are “tradeoffs” in capital planning?
» Defining budgets, priorities, and metrics
» Best practices and implementation
How can you perform tradeoff analysis?
» “Bottom-up” selection
» “Top-down” selection
Planning for Performance
» Demo in Excel
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Tradeoff Analysis
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What is Tradeoff Analysis?
You have a set amount of resources…
How do you spend them to best achieve your objectives?
Resources:
Objectives:
» Budget
» Asset types
 Operating
 Capital
» Staff
 Project managers
 Support staff
» Outside labor
» Political Capital
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



Bridges
Pavement
Bike lanes
Transit
» Priorities
 Safety
 Customer service
What is Tradeoff Analysis?
You have a set amount of resources…
How do you spend them to best achieve your objectives?
Budget
Bridge
Budget
Pavement
Budget
Safety
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Highway
Transit
Budget
Customer Service
Capital
Maintenance
What is Tradeoff Analysis?
Characteristics of Best Practice
» Objectives defined by performance metrics
» Data-based, measurable, comparable
» All objectives managed by a single process
Implementation
1.
2.
3.
4.
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Define objectives
Select metrics
Design a methodology
Select a tool
Methods of Tradeoff Analysis
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Capital Planning Inputs
Projects
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Data
How to Combine the Inputs?
“Top-down” Approach
» Projects are bucketed by objective
» Distribute funds into the buckets
» Select projects within the buckets
“Bottom-up” Approach
» Each project = multiple objectives
» Overall score from components
» Take top scorers until budget is gone
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Choosing a Methodology
“Top-down” prioritizes your priorities
» Useful when you don’t own the assets or projects
» Works best with built-in buckets (programs)
“Bottom-up” unifies the playing field
» Useful when you simply want rank-order
alternatives…
» …but, it may limit big-picture thinking
The best option probably combines the two
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Tradeoff Analysis in Excel
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Choosing a Tool
Spreadsheet-based tools
» NCHRP Report 806 – Bottom-up methodology
» Planning for Performance – Top-down methodology
Dedicated software packages
» Scaling and weighting of metrics
» Computing and optimizing overall performance
» Click-and-drag budget interfaces, visualizations
Many users: How much can I do in Excel?
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Planning for Performance
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