Recommended Approach

We believe a modified approach based on one of the traditional tools is the best fit for capital cost accounting in SCM. Because an organization with its own financial statement may serve many supply chains, SCM demands more detail in accoimting for capital costs than an approach like EVA. As our example at Old Line shows, we must be able to associate costs for the use of capital 

A sound approach is to use capital recovery factors from the engineering economy discipline as practiced by industrial engineers. The approach is used to evaluate the cash flow implications of potential investments in operations improvements. As described here, this approach should also assure that supply chain partners relying on EVA would produce acceptable numbers. This is because decisions made at the individual process level will be consistent with building shareholder value as measured by EVA. 

To illustrate, we go back to our example of Acme s investment in Project A described in Chapter 24. Recall lhat the NC machine would cost 600,000 and have a 5-year life. We can use this information to compare the capital charge under varying assumptions. For simplicity, let s assume the machine has no value at the end of the 5-year period. Acme s cost of capital is 15%. 

The capital charge is less sensitive to the cost of capital. A 20% rate produces only a 10% change over a 15% rate ( 4 in Table 25.9). A 10% rate produces 14% reduction ( 5 in Table 25.9). One might conclude that economic life is a much more important factor than the firm s cost of capital. No matter what assumptions are used, it s apparent that conventional accounting significantly understates the cost of capitalized assets whether they are equipment or inventory. 

We should point out that the cost of capital might appear on the income statement in other ways. If the company borrows to finance purchase of the machine, then the interest will be charged. If the asset is leased, the lease cost 

---

Regardless of which algorithm is used for fast calculation of Ewald sums, the computational cost is now competitive with the cost of cutoff calculations, and there is no longer a need to employ cutoffs for purposes of efficiency. Since Ewald summation is the natural expression of Coulomb s law in periodic boundary conditions, it is the recommended approach if periodic boundary conditions are to be used in a simulation. 

J. H. Hagopian, Validation of a Recommended Approach to Recirculation of Industrial Exhaust Air, vol. I, Washington, D.C. U.S. Department of Health, Education and Welfare, NIOSH, 1979, DHEW (NIOSH) Publication No. 79-143A. 

Design practice breaks the overall problem into small component parts which allow for simple analysis and solution. This is the recommended approach for selection and sizing of process piping. 

If jiopen is erroneously interpreted as t, results from an open system give significant errors when the inlet and outlet Peclet numbers are less than about 100. If the openness of the system cannot be avoided, the recommended approach is to rescale g t) so that it has the correct mean ... 

Method validation guidelines for use in trace analysis have been proposed by various authors, but there is little consistency in the recommended approaches. The general validation guidelines proposed by standards organizations such as ISO (International Organization for Standardization), DIN (Deutsches Institut fUr Normung German Institute for Standardization) and others are often not well defined and consequently... 

Lewis, J. A., Snyder, L. R., and Dolan, J. W., Initial experiments in high-performance liquid chromatographic method development. II. Recommended approach and conditions for isocratic separation, ]. Chromatogr. A, 721,15,1996. 

This section addresses topics common to all PrHA methods. A step-wise procedure for conducting a PrHA according to PSM Rule requirements is presented, followed by recommended approaches for analyzing scenarios, deciding on action items, and incorporating facility siting and human factors into the PrHA. 

Because a PrHA can require a substantial investment, it is important to identify potential overlap with other DOE hazard analysis requirements. This section provides a recommended approach for satisfying the PSM Rule and the related requirements of a nuclear safety analysis report (SAR). 

FDA, Guidance for Industry Recommended Approaches to the Integration of Genetic Toxicology Study Results, November 2004, Available at http / /www.fda.gov/cder/guidance. 

For each test it is advised to analyze the samples with replicates (e.g., n=6). The acceptance criteria are based on the method purpose and on the validation characteristics. A recommended approach would be to propose acceptance limits based on the results of the Gage R R study. If this study is not performed the Horwitz equation can be used to relate method repeatability with method reproducibility. Typically the difference in average assay values for DS methods should be within 2.0% and the precision should be less than 1.0% RSD in each laboratory. For DP, these limits are 3.0% and 2.0% for average assay difference and for the precision in each lab, respectively. The impurities are usually considered at a 0.5% level and the typically allowed difference between labs... 

The basis of the recommended approach to a hazard assessment of the potential immunotoxicity of a substance is that many immunotoxic substances can be identified via the standard tests for systemic toxicity. Special smdies to characterize effects of concern for immunotoxicity are used only when necessary for adequate hazard assessment. The nature of special smdies, and when they should be conducted, need to be decided on a case-by-case basis. A tiered approach to the identification of immunotoxic hazard in routine toxicology is described in WHO/IPCS (1996). 

Appendix I and Appendix J Appendix K, and Appendix L summarize the diagnostic criteria, and Figure 13-4 gives an overview of our recommended approach to the management of several anxiety-related disorders. 

Another approach is to prepare a stock solution of high concentration. Linearity is then demonstrated directly by dilution of the standard stock solution. This is more popular and the recommended approach. Linearity is best evaluated by visual inspection of a plot of the signals as a function of analyte concentration. Subsequently, the variable data are generally used to calculate a regression line by the least-squares method. At least five concentration levels should be used. Under normal circumstances, linearity is acceptable with a coefficient of determination (r2) of >0.997. The slope, residual sum of squares, and intercept should also be reported as required by ICH. 

To maximize efficiency, the recommended approach is to perform the equivalency study first and use the data of batch A to fulfill some of the repeatability and reproducibility requirements. The remaining experimental work would be manual analysis of the samples for the equivalency study and the reproducibility study at the receiving laboratory. 

The following summary provides a recommended approach to the interpretation of an unknown spectrum which may be adopted until experience has developed an intuitive appreciation of the characteristics of infrared spectra. It should be used in association with the more detailed notes which follow, describing the way in which characteristic group frequencies arise and the variations in frequency position which accompany environmental changes. 

Negligible risks or doses used to classify exempt waste could be established based on a variety of considerations, consistent with the different approaches to risk management for radionuclides and hazardous chemicals described in Section 1.5.3. For noncarcinogenic hazardous chemicals, NCRP recommends that a negligible dose should be set at a small fraction (e.g., 10 percent) of a nominal threshold for deterministic responses in humans the recommended approach to estimating this threshold is described in Section I.5.5.3. For radionuclides, NCRP has recommended that an annual effective... 

As emphasized in Section 1.1, the recommended approach to classifying waste does not provide a basis for establishing waste acceptance criteria at specific disposal sites. NCRP expects, however, that waste classified as exempt or low-hazard in accordance with its recommendations should be acceptable for disposal in the associated type of disposal facility at well-chosen sites. 

Based on these considerations and the purpose of this study, the recommended approach to defining an exempt class of waste that contains low levels of hazardous substances focuses on disposal as the intended disposition of exempt material. Consideration of other dispositions of exempt material e.g., recycling, reuse in commerce) is beyond the scope of this study. However, the principles used to exempt waste for purposes of disposal based on risk could be used to exempt such materials for any other purpose. 

In many respects, the foundations and framework of the proposed risk-based hazardous waste classification system and the recommended approaches to implementation are intended to be neutral in regard to the degree of conservatism in protecting public health. With respect to calculations of risk or dose in the numerator of the risk index, important examples include (1) the recommendation that best estimates (MLEs) of probability coefficients for stochastic responses should be used for all substances that cause stochastic responses in classifying waste, rather than upper bounds (UCLs) as normally used in risk assessments for chemicals that induce stochastic effects, and (2) the recommended approach to estimating threshold doses of substances that induce deterministic effects in humans based on lower confidence limits of benchmark doses obtained from studies in humans or animals. Similarly, NCRP believes that the allowable (negligible or acceptable) risks or doses in the denominator of the risk index should be consistent with values used in health protection of the public in other routine exposure situations. NCRP does not believe that the allowable risks or doses assumed for purposes of waste classification should include margins of safety that are not applied in other situations. 

---