Dear Mr.

CEO,

As per your request, we are planning out our most cost effective route for the Pipeline
Project near Vernal, Utah. I am going to show you step by step of the options we come
up with.
First, I analyze the cost of running the pipeline strictly through the BLM land.

a) Running west, south and then east to the refinery: 18 + 43 h

+ 72 = 133

$237,000 , BLM cost = 133 mi x $237,000

= $31,521,000

b) Heading east through the mountain and then south to the refinery:

54 + 43 h = 97

Cost:

97 x $237,000
+ $2,896,000 ( hh cost)
+ $575,000 (Environment st)
+ (8 x $12,000) (8 hs )

= $26,556,000

Secondly, I analyze the cost if we run it through the private land.

a) The shortest distance across the private ground to the refinery.

h =432 + 542

h 69.03

Cost:

69.03 miles x ($195,000 h + , + $237,000 normal

cost) $29,820,960

b) Straight across the private ground, then straight to the refinery.

h = 43 x $432,000 + 54 x $237,000 = $31,374,000

My last option is to cross the private land at an angle, then join the BLM land to run the
remaining pipeline. I take the first derivative, then use side, side, angle to find the most
cost effective option. This option runs 51.43 miles through the private land, starting at
41.67 degree angle from the well. This would meet the BLM land at a 48.33 degree angle.
The cost function for this option:

C(28.22) = $432,000 x 51.43 + $237,000 x (54-28.22)= $28,327,620.00

This is how I get this amount:

y = length of pipeline

2 = 432 + 2

= [1,849+2]1/2

C(x) = $432,000 x y + $237,000 x (54-x)

C(x) = $432,000 x (1849 + x2)1/2 + $237,000 x (54-x)

$432,000
C(x)= 1849+ 2 $237,000

Set C(x) equals to zero

$432,000
C(x)= 1849+ 2 $237,000 =0

Solve for x, we get: x 28.22 miles

Solve for y:

y = length of pipe = 28.222 + 432 =51.43miles

Find the angle:

90 sin
=
51.43 43

sin a 0.747

a 48.33

Find the remaining angle: 180 - 90 - 48.33 = 41.67

 BLM Ground
18 miles
BLM Ground

41.67o
43 miles

69.03 miles
Private Ground
51.43 miles

90o x 48.33o 54-x

72 miles - BLM Ground

Here is the graph of the cost function:

Conclusion: Heading east through the mountain and then south to the refinery the most
cost effective option.
Reflection:

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