Sourcing portfolio design

In this section, we discuss a variety of factors that influence the design of the sourcing portfolio. 

The current R D portfolio does not allow for out of the box thinking. It needs to encourage exploratory basic research involving other approaches, such as methods of enhancing hydrogen production by radiolysis or photolysis in properly designed radiation sources. 

The STAR portfolio of designs was initiated in the 1997 time frame and is comprised of SSTAR, STAR-LM and STAR-H2. They employ technological innovations of increasing lead-time to deployment (see Fig. XXIV-18). The STAR portfolio share many features with the Encapsulated Nuclear Heat Source (ENHS, see ANNEX XIX) and the 4S concepts, see Fig. XXIV-18. The Pb technology and nitride fuel technology are in common with the BREST designs. 

Market simulations are run many times for a range of initial aquifer levels, with input obtained via Monte Carlo sampling from a joint, multivariate distribution created from inflow and withdrawal data. Simulated supply and demand conditions are translated into market prices for each transfer type, and the expected cost and reliability of various combinations, or portfolios, of transfer types can be computed. The transfer types are specified for each scenario, and a sequential search method is then used to identify minimum cost portfolios that meet designated supply-reliability constraints (Figure 3). Differences in the cost of the respective portfolios indicate the value of including each transaction type in the market, as well as how the cost of market-based approaches compares to the development of the least expensive new water source (Carrizo Aquifer). 

Design a tailored supplier portfolio. Firms should select a combination of responsive and low-cost sources that may be onshore, near-shore, or offshore. Responsive, onshore sources are best suited for high-value products with volatile demand and relatively low labor content. Low-cost, offshore sources are best suited for products with high labor content, large predictable demand, and low transportation cost relative to product value. 

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