Traditional Hydraulic Simulation Simulations for Marketing Physical / Financial Models Conclusions 3
Cost focus Measure hydraulic efficiency Situational analysis Capital analysis Performance measurement
Pressure = $$$ Assets = Options Hydraulic Model = Risk Management Pipelines = Time machine
Increase Market Share Satisfy Market Demand Capital and Optionality Risk Management 6
Convert "Cost" into Revenue Margin Analysis Revenue Management approach Asset Positioning and Competition Example:
Commoditization and Interruptible Speculative facilities Physical based Financial Options Non-traditional approach New Services
Rationalizing efficiency Selection criteria Asset deployment Asset re-deployment 9
Spark Spread Physical / Financial modeling Expanded Cost modeling Real time options 10
Physical modeling capability is critical Physical assets are financial options Detailed physical simulation models are risk management tools. Integration of physical and financial models will expand.
