John Richardson, Michael Bradshaw, Anthony Jaeger,

Matthew Randall

04/17/2017

CEO

Gas Co. Inc.

Dear CEO ,

Our team has assessed the options for building the pipeline in Vernal,
Utah. We feel we have exhausted all options for building the pipeline. Attached
to this letter are our calculations and our findings for each of the options
currently presented for construction.

1
 Is this upside down on every version of this? Maybe google misinterpreted
the left

The surveyors in the field have taken distance measurements around the
BLM land. We would need to build the pipeline 8 miles to the west, turn south for
16 miles, then turn east for 40 miles. The estimated cost of construction per a
mile is $480,000. Although, this would save time and initial cost. This is not our
best option. Here is the cost calculation for option #1.

Total cost = (8 miles + 16 miles + 40 miles) x ($480,000) =

$30,720,000

The second option would be drilling through the mountain and continuing
around the BLM to the refinery. This will present some additional costs, but the
total distance of the pipeline will be shorter. There is a one-time cost of
$4,500,000. We will also need to conduct an environmental impact study which
will cost $600,000. This will also cause an 8-month delay of construction and the
total cost of delays will be $800,000. The length of the pipeline will be 48 miles
total. It is cheaper than option #1, but is still not our best option. Here is the cost
calculation for option #2.

Total cost =$ 5,900,000+ 480,000 x 48 miles) = $28,940,000

The third option is to build a direct pipeline across private land to the
refinery. The added cost to purchase the land the pipeline runs through is
$360,000 per a mile. The length of the direct pipeline is 165 miles or about
35.78 miles (note: 165 will be used for precise calculations). This is still not the
best option even though the distance is the absolute minimum. Here is our
calculation for option #3.

Total cost =$ 840000 x 16 $30,052,753.62

The fourth option is running a pipeline directly South through private land
to BLM land then East to the refinery on BLM land. The total length through
private land is 16 miles. The total length through the BLM land is 32 miles. This
is still not the best option, here is our calculation for option #4.

2
 Total cost =( $ 840000 x 16)+($ 480,000 x 32)= $28,800,000

The last option is the best option. It involves a series of equations to find
the appropriate angle to build the pipeline across the private land to the BLM
and then east to the refinery (see diagram for variables used in calculations).

16
sin = so h=16 /sin
h

x=(16 /sin ) cos

Total cost =( $ 840,000h)+ $ 480,000(32x )

C()=( $ 13,440,000/sin )+ $ 480,000(3216 cot)

Now that we have the cost as a function of some angle, we can find the
minimum cost by finding the derivative and setting it equal to zero.

d d
C' ()=$ 13,440,000 (csc)$ 7,680,000 (cot)
d d

C' ()=$ 13,440,000(cotcsc )$ 7,680,000(csc 2 )

3
 C' ()=$ 13,440,000(cotcsc )+$ 7,680,000 (csc 2 )=0

Now that we have the derivative set to zero we need to factor the
equation and since csc has no zeros we can ignore that root. So then,

2
csc ($ 13,440,000( cos)+$ 7,680,000)=0

$ 13,440,000(cos)+ $ 7,680,000=0

(cos)=$ 7,680,000/$ 13,440,000

$ 7,680,000
=arccos( )
$ 13,440,000

=55.15 *

*note this is not exact angle but exact angle is used for calculation
below.

Now that we have the angle we can plug in the angle into our original total
cost function. The total cost is,

$ 13,440,000
C(55.15 )=( )+ $ 480,000(3216 cot(55.15 ))=
sin (55.15 ) $26,389,560.28

Reflection:

This class has helped us think about how to look at a problem from
different angles. When looking at a calculus problem you are often given a
choice of how you want to advance with the problem and although many
of the options can get you to the same answer there is usually best way to
start. This puts you in the mindset of looking at a problem and thinking
about it before jumping straight into it.

4
 We also found how a simple mistake could cost millions. During our
initial calculations one of us inverted our h value accidentally and
continued to solve the problem. When comparing answers we found out
something was wrong and worked at the problem together. We found the
correct formula, degree, and a few million cheaper cost. This situation
helped us understand the value having team members double check our
work.

Sincerely,

John Richardson, Michael Bradshaw, Anthony Jaeger, Matthew Randall