Case Analysis of Nike, Inc.: Cost of Capital (CON)

Referring to my previous article (http://emfps.blogspot.com/2011/06/case-analysis-of-nike-inc-cost-of.html), someone who had received my spreadsheet, had the problem to calculate the Cost of Debt by using of IRR method (Method 2). As the matter of fact, this method can be utilized to obtain the required return rate on Bonds in which you can use it even in your own business.

How can we use from this spreadsheet to calculate the required return rate of Bonds?

Here I am willing to explain it step by step as follows:

Please look at the spreadsheet.

-Enter your new Coupon rate (annually) on Cell C9 and Price of Bond based on par value equal $100 on Cell C10

-You should use the try and error method by changing on required return rate speculated by you on Cell C21 and C22 in which finally Cell C23 will be equal to Cell C17 (C23 = C17).

How can you guess the required return rate?

I have already depicted it on below link:

 http://emfps.blogspot.com/2011/06/case-analysis-of-nike-inc-cost-of.html

Where I stated: “Which method is to calculate cost of debt better than others?  It is important to find the relationship between the required return and the coupon interest rate. When the required return is greater than the coupon interest rate, the bond value ……”

Let me bring you an example as follows:

Assume the company has issued the $500,000 nominal amount of 8% rate of Bonds from 1999 to 2009 was issued by a subsidiary at $95.068 per $100 par value. How can we calculate the required return rate by using of my spreadsheet?

-Enter on Cell C6: 1999

-Enter on Cell C6: 2009

-Enter on Cell C9: 8%

-Enter on Cell C10: 95.068

-Since the price of Bond is less than Par value, our speculate on required return rate should be more than Coupon rate (annually)

-Click on Cell C21where we can see this formula: = - PV (rate, number of years, Coupon payment). Of course, the previous numbers on Cell C21 are: = - PV (0.1415, 25,135)

-Replace the amount for required return more than Coupon rate, for instance, 8.5%. Where we have: = - PV (0.085, 10, 80) or = - PV (0.085, C19, C18)

-Click on Cell C22 where we can see this formula: = Par Value / (1+required return) ^n. Of course, the previous numbers on Cell C22 are: = 1000/ ((1+0.1415) ^ 25)

-Replace the same amount of required return (8.5%) and power equal to 10. Where we have: = 1000 / ((1+0.085) ^ 10 or = C20 / ((1+0.085) ^ C19

-We can see that Cell C23 is more than Cell C17 (967.19 > 950.68). Therefore, we should increase again the required return rate to 8.8%

-All previous steps should be repeated. Now, we have: C23 = 948.20 which is less than C17= 950.68

-In this case, we should decrease the required return for instance to 8.76%. Finally we will have C23 approximately equal to C17 (C23 = 950.71 and C17 = 950.68)

In the result, the required return rate will be equal to 8.76%.

 

Note:  “All spreadsheets and calculation notes are available. The people, who are interested in having my spreadsheets of this case analysis as a template for further practice, do not hesitate to ask me by sending an email to: soleimani_gh@hotmail.com or call me on my cellphone: +989109250225. Please be informed these spreadsheets are not free of charge.”

Risk of Assets

Let us look at the price of Soybeans as one of the agriculture commodities and price of Gold during the period of one year (From Aug 31, 2010 to Aug 31, 2011) as follows:

Date                                          Aug 31, 2010                            Aug 31, 2011   

Price of Soybeans                   1,045.25(¢ / bushel)                    1,457.00 (¢ / bushel)

Price of Gold                          1247.29 ($ / troy ounce)              1,829.80 ($ / troy ounce)   

                   

If you have stored one troy ounce of Gold, your real rate of return will be: ra = 46.7%

But if you have invested on Soybeans during the period of one year, definitely you can earn minimum 8% of  your initial investment which is equal to 9978.32 cent (1247.29 * 8%  * 100 ) as your cash earning or cash dividend.  To calculate the rate of return for Soybeans, we have:

V(t-1) = 124729  cent 

Amount of bushel = 124729 / 1045.25 = 119.33 bushel

V t = 119.33 * 1,457 = 173862.86 cent

ra = 9978.32+ (173862.86 -124729) / 124729  =  47.4%

As you can see, the risk of two assets is approximately the same.

Of course, soybean oil alone accounts for about ninety percent of all fuel stocks in the US.

Referring to the link of http://www.nytimes.com/2006/07/13/business/13ethanol.html, it stated:

“Biodiesel produced from soybeans produces more usable energy and reduces greenhouse gases more than corn-based ethanol, making it more deserving of subsidies, according to a study being published this month in The Proceedings of the National Academy of Sciences.”

Now, I willing to know if above mentioned is a good news or bad news.

Research Proposal: An Application of Six Sigma

Referring to my previous article of “Application of Six Sigma to Improve Process in Construction Projects” on link “http://emfps.blogspot.com/2011/08/application-of-six-sigma-to-improve.html”, let me bring you another example in the case of Research proposal as application of Six Sigma. I think we will be able to match this research into framework of Six Sigma where we have DMAIC as follows:

 

-Define phase

-Measure phase

-Analysis phase

-Improve phase

-Control phase

 

Now, please carefully read below Research Proposal and overlap it into a Six Sigma’s framework.

 

                                    Research Proposal

Topic: Exploring the New Idea to Manage the Cost and the Time of Geotechnical Investigation Projects

Introduction

Geotechnical investigations are performed to evaluate those geologic, seismologic, and soils conditions that affect the safety, cost effectiveness, design, and execution of a proposed engineering project.

Insufficient geotechnical investigations, faulty interpretation of results, or failure to portray results in a clearly understandable manner may contribute to inappropriate designs, delays in construction schedules, costly construction modifications, use of substandard borrow material, environmental damage to the site, post- construction remedial work, and even failure of a structure and subsequent litigation. Investigations performed to determine the geologic setting of the project include: the geologic, seismologic, and soil conditions that influence selection of the project site; the characteristics of the foundation soils and rocks; geotechnical conditions which influence project safety, design, and construction; critical geomorphic processes; and sources of construction materials. A close relationship exists between the geologic sciences and other physical sciences used in the determination of project environmental impact and mitigation of that impact. Those individuals performing geotechnical investigations are among the first to assess the physical setting of a project. Hence, senior-level, experienced personnel are required to plan and supervise the execution of a geotechnical investigation.

Geotechnical investigations are to be carried out by engineering geologists, geological engineers, geotechnical engineers, and geologists and civil engineers with education and experience in geotechnical investigations. Geologic conditions at a site are a major influence on the environmental impact and impact mitigation design, and therefore a primary portion of geotechnical investigations is to observe and report potential conditions relating to environmental impact. Factors influencing the selection of methods of investigation include:

a. Nature of subsurface materials and groundwater conditions.

b. Size of structure to be built or investigated.

c. Scope of the investigation, e.g., feasibility study, formulation of plans and specifications.

d. Purpose of the investigation, e.g., evaluate stability of existing structure, and design a new structure.

e. Complexity of site and structure.

f. Topographic constraints.

g. Difficulty of application.

h. Degree to which method disturbs the samples or surrounding grounds.

i. Budget constraints.

j. Time constraints.

k. Environment requirements/consequences

l. Political constraints.

Problem Statement

Most investigators involved in geotechnical projects are faced with the problem of obtaining reliable data within a short time from an enormously complex subsurface medium at minimal cost.

Geotechnical engineering inevitably involves the use of engineering judgment and dealing rational with considerable uncertainty. At the time of designing as part of tender specifications, substantial difference between actual soil profiles and available soil profile is very important. Since time interval between issue of tender document and submission of technical bid is very short, we need to have an estimation of the allowable bearing capacity of soil. Soil investigation is very expensive. Engineering judgment comes from execution and experience comes from bad engineering judgment. Sometimes when we study Geotechnical reports, we perceive that there is the great mistake because the results of Triaxial(U.U) and Shear box(C.D) tests are too much less than the results of S.P.T tests. It can be raised due to below reason.

It seems that they have done Triaxial and Shear box tests on undisturbed samples collected from High Over Consolidation clay (H.O.C clay layers) and it have been caused that undisturbed samples are changed to disturbed samples in Laboratory(the allowable bearing capacity have been calculated in accordance with laboratory tests).

Goals and Objective

Throughout a project’s planning, design, and construction phases, Cost Management is employed as a means of balancing a project’s scope and expectations of quality and budget.

The approach can be summarized as requiring the following three steps:

1. Define the scope, the level of quality desired, and the budget

2. Ensure that the scope, quality, and budget are aligned

3. Monitor and manage the balance of these three components throughout the life of the project.

There are many objectives to conduct this research as follows:

-To identify the scope of geotechnical investigation program

-To analyze the influence of the loading on field investigation

-To optimize the plan for Geotechnical investigation. For instance, sometimes we have to increase the number of Boreholes or Test pits abnormally because of the huge fluctuation of soil profile whereas it is possible we gain the benefits to decrease the number of Boreholes by utilizing of data obtained from other field of study such as Geology, Geophysics, and Hydrogeology and so on.

One of the most crucial goals to decrease the cost and the time of Geotechnical investigation at this research is to use of a new idea or new strategy by mixing ASTM and DIN standards of SPT (Standard Penetration Test) in the field study. In fact, the variation can be minimized if standard practices are followed during the soil investigation.

Scope of Study

The limitation of this research is to prepare the data of soil for insensitive projects such as the buildings less than twenty floors in which we do not need to generate the exact mechanical characteristics of soil, low loading and where Allowable Bearing Capacity of soil is more than 1kg/cm2. For instance, shear strength parameters of soil such as Phi and C can be measured with error and decimal around 0.01 to 0.001 by using of Triaxial tests. But we are not urged to obtain these results for some of the projects while for designing of an earth dam, we should present these parameters with the least error and decimals. The meaning of this reality is the same the quality of designing. As an example, we can change Phi = 45.37 degree to the range of Phi = 32 -42 degree or instead of C = 0.278 kg/cm2, we consider C = 0.2 – 0.25 kg/cm2. Another limitation is related to total statistics result of correlation between ASTM and DIN standard penetration test because it is clear that we proceed to correlate two standards on page by using of energy balancing but we should experience the confirmation of this correlation at the site.

Literature Review

 At the first, a geotechnical expert should be fully connected with structure engineer and architectural designer because of checking the types of loading, Code height, Benchmark, Layout and so on. I had an experience in the case of soft saturated clay by using of pre-cast concrete piles. Finally I understood we had the lack of Geophysics and Geology investigation before geotechnical investigation because there was different data from stratum in the distance of less than 5 meter between two points on the ground. In fact, Geomorphology of area was dendrite shape.

Braja M Das (2006) stated a soil exploration program for a given structure can be broadly divided into four phases:

1. Compilation of the existing information regarding the structure

2. Collection of existing information for the subsoil condition in which the useful information can be obtained from the following sources:

a. Geologic survey maps

b. Country soil survey maps prepared by the U.S. Department of Agriculture and the Soil Conservation Service

c. Soil manuals published by the state highway department

d. Existing soil exploration reports prepared for the construction of nearby structures

Information gathered from the preceding sources provides insight into the type of soil and problems that might be encountered during actual drilling operations.

3. Reconnaissance of the proposed construction site

4. Detailed site investigation

We have spacing of boring and the depth of Boreholes. In this research we will take a debate about them mentioned by Sowers (1970) and the American Society of Civil Engineers (1972) by utilizing the loading of construction and Bossinesq method and Vertical stress of soil layers.

On the other hand, Bowles (1996) mentioned that the standard penetration test, developed around 1927, is currently the most popular and economical means to obtain subsurface information (both on land and offshore). It is estimated that 85 to 90 percent of conventional foundation design in North and South America is made using the SPT. This test is also widely used in other geographic regions. The method has been standardized as ASTM D 1586 since 1958 with periodic revisions to date.

Research Methodology

In this research, I am willing to present you how we should select and collect data and use them accompanied by mixed standards of DIN (Germany) and ASTM (USA) to manage a geotechnical investigation project in which we will have the minimum cost and time. In fact, the questions are: Do we actually need to do expensive laboratory tests such as three-axial, Sheer Box or Consolidation for all of the projects? What are the controlling factors to design a comprehensive program for field investigation and laboratory tests? I have brought here two samples which are real projects conducted in Iran.

Geotechnical Investigation Plan

Here are other sources for this research as follows:

ü  Using of reference books such as Bowles and Braja M Das

ü  Using of ASTM (American Standard)

ü  Using  of DIN (Germany Standard)

ü  Using of Internet to collect secondary

ü  Using of Actual projects fulfilled in Iran as sample

Significant of Research

The most important significant of this research is to examine a new idea as a strategy and applications of it to decrease the time and the cost of geotechnical projects.

In the matter of fact, this research have revealed the actual applications of the light hammer of DIN that it can used for SPT tests in which we had have cut-fill and have to recognize the boundaries of loose and hard soil at the site. Sometimes, we cannot use from heavy hammer of ASTM for SPT.

Data collection and analysis of discussion

 Sometimes alluviums or loose fill (made-up gravel) have been laid unconformity on geology formations included: out crops, folded rock stratums that their geomorphology have been shown in shape of up and down (roughness).

Therefore the logs of two bore holes, which have very low distance between them, are not compatible together. It is possible, one of them encounter to rock layer in depth of 1m but another bore hole come in contact with this rock layer in depth of 10m.

One of the best ways to specify this problem is to use of German Light S.P.T equipment (DIN 4094). The specifications of this equipment are as follows:

D =22 mm          Rod diameter

D*=35.6 mm      Point diameter

a =60 degree      Point angle

W = 10 kg          Hammer mass

H = 50 cm          Free falling height

 A = 10 cm2       Point area

In this research I am willing to exchange number blows of DIN 4094  to ASTM-D1586 in accordance with energy equilibrium’s principle where we will be able to use all correlation Tables of SPT test (N) which are covered by ASTM -D 1586  . Two record samples, which are real projects conducted in Iran, exactly have been examined. The reasons behind to select these projects by me are as follows:

- Jahan project was only investigated by 5 Bore holes while the area of the site was about 400000 m2.Of course, 12 test pits with average depth of 1.1 m  were excavated to confirm an Index layer. Maximum depth of Boreholes was equal to 15m.

- Khavar Dasht project was investigated by 6 test pits while the area of the site was only 1500 m2 exactly the opposite of Jahan project. There were 3 zones at the site and maximum depth of Boreholes was equal 10m. And so the cost and time for each status (ASTM method and DIN method) have been calculated and compared.

Finally, data collection and analysis of discussion are included as follows:

ü  Using of the balance of energy to exchange the result of SPT by DIN method to SPT by ASTM method

ü  Using of tables and graphs of ASTM method for the result of DIN method

ü  To illustrate the method of SPT test by DIN in Test pits

ü  Using of SPT results instead of Engineering Lab tests such as Three-axial or shear Box

ü  To obtain Allowable Bearing Capacity of the soil

ü  To calculate the cost and the time for at least two actual geotechnical project 

 References

1. American Association of State Highway and Transportation

Officials, 444 N. Capitol St., N.W., Washington, DC 20001.

2. American Society of Civil Engineers, New York, NY

Journal of Geotechnical Engineering Division (1974-)

Journal of Soil Mechanics and Foundation Division, ASCE

(1955-1973, inclusive)

3. AASHTO (1990), Standard Specifications for Highway

Bridges, 14th ed., 420 pp.

4. Baguelin, F, et al. (1974), "Self-Boring Placement

Method of Soil Characteristics Measurement,"

Proceedings, Conference on Subsurface Exploration

for Underground Excavation and Heavy

Construction, ASCE, pp. 312-322.

5. Bowles, J. E. (1992), Engineering Properties of Soils and

Their Measurement, 4th ed., McGraw-Hill, New

York, 241 pp.

6. Dahlberg, R. (1974), "Penetration Testing in Sweden,"

Proc. 1 st ESOPT Stockholm, Sweden, vol. 1, pp.

115-131.

7. De Mello, V. F. (1971), "The Standard Penetration Test,"

4th Pan-American Conf on SMFE, San Juan,

Puerto Rico (published by ASCE), vol. 1, pp. 1-86

(with 353 references).

8. Hansen, J. B. (1970), "A Revised and Extended Formula

for Bearing Capacity," Danish Geotechnical Institute,

Copenhagen, BuI. No. 28, 21 pp. (successor

to BuI. No. 11).

9. Hvorslev, M. J. (1949), "Subsurface Exploration and

Sampling of Soils for Civil Engineering Purposes,"

Waterways Experiment Station (may still

be available from Engineering Foundation, NY),

521 pp.

10. Jamiolkowski, M., et al. (1988), "New Correlations of

Penetration Tests for Design Practice," Proc. 1st

ISOPT, vol. 1, pp. 263-296 (huge number of references

cited).

11. Kjellman, W. (1948), "A Method of Extracting Long Continuous Cores of Undisturbed Soil," 2nd ICSMFE, vol. 1, pp. 255-258.

12. Riggs, C. O. (1986), "American Standard Penetration

Test Practice," 14th PSC, ASCE, pp. 949-967.

13. Skempton, A. W. (1986), "Standard Penetration Test Procedures

...," Geotechnique, vol. 36, no. 3, pp.

425-447.

14. Soil Mechanics and Foundation Engineering

PSC Proceedings of Soil Mechanics and Foundation Division,

ASCE, 7th PSC: In Situ Measurements of Soil Properties (1975)

15. Wroth, C. P (1984), "The Interpretation of In Situ Tests,"

Geotechnique, vol. 34, no. 4, Dec, pp. 449-489.

Application of Six Sigma to Improve Process in Construction Projects

• 
  

1.0 Introduction

In recent decades, industry has been fluctuated with different approaches to process improvement. Even though the suggested exercises by professional quality groups such as W. Edwards Demming and emphasized in the probe for the Baldridge Award were valuable, the results were often self-serving and difficult to measure. Six Sigma is a data-driven approach that trusts intensively on the “voice of the client” as a focus for improving operational businesses and work environments. Consequently, the process is far less subjective than previous “quality” programs and recognizes that measurable results are top to the influence of change. When employed effectively, Six Sigma is a part of a company’s culture and, from an organizational perspective; this means to solutions that notably improve the efficiency of business practices. Six Sigma was fugled by companies such as Motorola and General Electric and was focused on achieving efficiency gains in manufacturing processes. Today, the program has developed into an effective tool for a diverse range of businesses. For instance, nowadays construction companies also utilize the project management control system to perceive the differences between special and common causes of variation. In this paper, I have brought some examples in the field of construction projects and have matched the concept of Six Sigma with them.

2.0 Literature Review

What is Six Sigma?

Six Sigma is an approach to quality improvement in which it  decreases the costs and increases productivity and profits through statistical and problem-solving tools that brings about breakthrough improvements with measurable influence on the bottom-line.

Sigma (s) is a measurement of quality which enables the determination of how effectively defects and variations from processes are eliminated. The various sigma levels are as follows: (Defects per million Error-free rate opportunities) 

Two Sigma 308,537    69.2% 

Three Sigma 66,807    93.3%

 Four Sigma 6,210      99.4% 

Five Sigma 233         99.977% 

 Six Sigma 3.4         99.9997% 

The processes in a Six Sigma-rated project operate at only 3.4 defects per million opportunities, or 99.9997% error-free.

HISTORICAL PERSPECTIVE ON SIX SIGMA

In the mid-1980s, Motorola, under the leadership of Robert W. Galvin, was the primary developer of Six Sigma. Bill Smith, a senior engineer and scientist within Motorola’s Communications Division, had subtilized that its final product tests had not anticipated the high level of system failure rates Motorola was experiencing. He recommended that the increasing level of complexity of the system and the resulting high number of opportunities for failure could be possible causes for this. He came to the conclusion that Motorola needed to require a higher level of internal quality, and he brought this idea to then-CEO Bob Galvin’s attention, persuading him that Six Sigma should be set as a quality goal. This high goal for quality was new, as was Smith’s way of viewing reliability of a whole process (as measured by mean time to failure) and quality (as measured by process variability and defect rates).

3.0 Data Analysis and Discussion

Before bring the examples, let me focus on some definitions and structure of Six Sigma as follows:

Each Six Sigma project follows the “DMAIC” which is depicted to below phases:

Define phase

·         - Identify the problem

·         - Define Requirement

·         - Define goal / change vision

·         - Set Goals

·         - Clarity scope & customer requirements

Measure phase

·         - Validate problem / process

·         - Measure performance to requirements

·         - Refine problem / goal

·         - Gather process efficiency data

·         - Measure key steps / input   

Analysis phase

·         - Develop Causal hypotheses

·         - Identify Best practices

·         - Identify Vital few Root causes    

·         - Assess process design

·         - Validate hypothesis

·         - Refine requirements

Improve phase

·         - Develop Ideas to remove root cause

·         - Design new process

·         - Test solutions

·         - Implement new process structure, systems

·         - Standard solution measure results

Control phase

·         - Establish standard measure to maintain performance

·         - Establish measure & receives to maintain performance

·         - Correct problem as need

·         - Correct problem as needed

In here, I would like to introduce a Synthetic model of Six Sigma which is named Lean Six Sigma. It is a combination of Lean methods and Six Sigma approaches. It is also sometimes referred to as Six Sigma Lean. Lean Six Sigma builds on the knowledge; methods and tools derived from decades of operational improvement research and implementation.

measuring and eliminating defects. The Lean Six Sigma approach draws on the philosophies, principles and tools of both. The structure of Lean Six Sigma has been showed on below Figure (1):Lean approaches focus on reducing cost through process optimization. Six Sigma is about meeting customer requirements and stakeholder expectations, and improving quality by measuring and eliminating defects. The Lean Six Sigma approach draws on the philosophies, principles and tools of both. The structure of Lean Six Sigma has been showed on below Figure (1):

 Figure (1)

Lean Six Sigma incorporates, and deploys, the key methods, tools and techniques of its predecessors

Lean focuses on waste elimination in existing processes

 

Six Sigma focuses on Continuous Process Improvement (DMAIC) to reduce variation in existing processes

Six Sigma also focuses on New Process Design/Complete Redesign (DMEDI) for wholesale redesign of processes as well as new products and services

 

cc   As you can see, DMAIC is the real structure of Six Sigma.

Now, I would like to illustrate two examples of Construction projects compatible with DMAIC as follows:

Example (1):  An executive method for embankment layers in roads and yards

Define of the problem (D phase):

In this example, I have tried to show what is the distance between two   consecutive soil storage area that they have been unloaded by Damp Trucks    for reaching to designing specifications in the roads and yards.

It is possible only with having results of laboratory tests.

Easily, we can see that above problem is independent of optimum moisture.   When we proceed to execute a compacted layer, for example: soil, Base, Sub base layer in road and yards, we should know how much the soil or aggregate (as a base or sub base layer) per square meter is need for reaching to    specifications of design (thickness, percentage of compaction).

Measure phase (M):

In this phase we approach on validate and refine problem accompanied by measuring of requirements. In this example it has been raised: “what is the distance between unloading of two consecutive Damp Trucks a long road so that two important specifications are produced?”

What are the two important specifications? (Measuring of requirements)

After designing of a pavement for roads or yards, civil engineer obtains several layers of aggregates (base or sub base) and soil that they must be compacted and executed under asphalt. Each one of these layers has its own specifications included: thickness, percentage of compaction, maximum dry density, optimum moisture, atterburg limits, sandy equalent, crashing percentage and etc.

Two specifications of them are very important: thickness and compaction percentage.

Analysis phase (A):

In order to execute a filling layer on sub grade in the road, we start it in accordance with four stages as follows:

A)    Unloading of soil or aggregate on required area (XY) of sub grade with required volume (V₁) by a Damp Truck.

B)    To distribute storage area of soil (Unloaded by Damp Truck) by a Grader so that the soil or aggregate layer reaches to thickness of design specifications.

A)    Spraying on soil by watering - Can Truck in order to reach the soil or aggregate to optimum moisture.

B)    To compact the soil or aggregate by a Roller in order to reach to compaction percentage of design specifications.

    In this analysis, the target is to obtain the required area (XY) for unloading soil of each Damp Truck or the required volume (V₁) of unloading soil on area (XY) by each Damp Truck for reaching to specifications of design.

   Improve phase (I):

   In this phase, we should develop our idea to remove root cause or to solve the problem in which we have to use some tests and standards. At the first, we should define some parameters in accordance with the standards as follows:

-      w%      Natural moisture of the soil

-      Dn       Natural unit weight (Free unit weight of the soil)

-      Dm      Maximum dry density

-      R %     Compaction Percentage (Design Specification)

-      Z          Thickness of layer (Design specification)

-      V₂        Volume of dry compacted soil after filling

-      m₂        Weight of dry compacted soil after filling

-      m₁        Weight of natural soil (Free)

      - A required Area (XY) for unloading soil of each Damp Truck

    - V₁  required Volume of unloading soil on Area (XY) by each Damp Truck      

    In order to solve above problem, I has used from returning analyze as follows:

   An element of soil (X, Y, Z) has been considered after executing of the last stage (stage D).

Where:

V2 = Z.X.Y                                                                            (1)

m_{2 =} Dm. Z.X.Y.R                                                                  (2)

m_{1 =} m2 + (m2 * w %) = m2 (1 ₊ w %)                                    (3)

Therefore, it could be used from below formula:

V1 = m1 / Dn= Dm.Z.X.Y.R((1 ₊ w %) / Dn           (4)

X.Y = A = V1. Dn / Dm.Z.R((1 ₊ w %)                                 (5)

Now, we can solve two samples as follows:

Sample (1):

w = 3 %

Dm = 2.17 gr / cm3

R = 95 %

Dn = 1.53 gr / cm3

A = 10000 cm2

Z=15Cm

V1 = 2.17 * 15 * 10000 * 95 % * (1 + 3 %) / 1.53

V1 = 0.2 m3

Sample (2):

w = 3 %

Dm = 2.17 gr / cm3

R = 95 %

Dn = 1.53 gr / cm3

V1 = 6 m3 = 6000,000 cm3

Z=15Cm

6000,000 = 2.17 * 15 * 95 % * (1 + 3 %) A / 1.53

A = X.Y= 288226 cm2

A # 29 m2

Control phase (C):

In this phase, we proceed toward to check and control our solution by executing    real job at the site. We assume that it has been done the embankment of 10000 m3 on the road and according to the results of tests; there are 2 m3 of embankment as defects incompatible with our solution. We can calculate DPMO (Defects per million opportunities), Sigma Levels as follows:

DPMO = (2 / 10000) * 1000000 = 200

The number of DPMO can be converted to the Sigma level. For instance, in this example, 200 DPMO converts to slightly better than a 5 Sigma process.

Example (2): An Executive method for concrete placing (Cast - in - Place)

In Small building Sites

 Define of the problem (D phase):

There is the lack of the executive method for concrete placing at small building sites. Since there is not a mechanized and automatic systems for concrete placing ( Cast - in - place ) in small building sites (included : Batching plant , Batch mixer , Truck mixer , … ) , a contractor has to utilizes from drum mixer or handling mixer by volume batching method . When you use the drum mixer, you cannot produce the fresh concrete in accordance with weight batching and standards. In fact, you have to use from the volume batching by scaling of a bushel so that you will lose the accuracy of your job and increase errors.

Measure phase (M):

Since we have the standards to prepare the formula of the concrete mix design by using of weight batching, I has tried to show changing of weight batching to volume batching of concrete materials (cement, water, aggregates) so that weight batching has already obtained by using of ACI 211 (Concrete Mix Design). In order to execute concrete placing (cast-in-place) at the sites, it is needed to be obtained a mix design of concrete.

A mix design of concrete (in accordance with ACI-211) introduces us only the weight batching of cement, water, aggregates.

We can use from weight batching, if we have had a batching plant, batch mixer, truck mixer…

In fact, if we have had a mechanized and automatic system for concrete placing, it can be used only in big and large sites.

But we have to use volume batching instead of weight batching in small sites. In this example, I have presented a method for changing of weight batching to volume batching in which we should measure the compressive strength and workability (slump) of fresh concrete as two important quality factors after using of this executive method.

Analysis phase (A):

The analysis of this method is included three following steps in which we need to determine the weight batching in accordance with ACI -211:

1) We should get the results of simple tests on aggregates as follows:

- Sieve analysis of coarse and fine aggregates

- Free unit weight of coarse aggregate

- Free unit weight of fine aggregate

- Free unit weight cement

2) According to above tests results and tables of ACI-211, we can estimate weight batching of concrete materials.

3) We assume weights batching of concrete materials per one cubic meter of the concrete in according with point (2) are as follows:

-                Weight of coarse aggregate / 1 m³ concrete

-                Weight of fine aggregate / 1 m³ concrete

  

-                Weight of cement / 1 m³ concrete

-               Weight of water / 1 m³ concrete

Improve phase (I):

In this phase, we should obtain the solution for the problem mentioned in the phase of Define (D). At the first, we should get the volume of a batch that it is available for us and total volume of Drum Mixer should be recognized that it depends on to type of Drum Mixer (It is Standard).

-                  Volume of an available batch

-                  Total Volume of Drum mixer (Volume capacity of Drum mixer)

According to above stated, we have:

-                 Free Unit weight of coarse aggregate

-                 Free Unit weight of fine aggregate

-                 Free Unit weight of Cement

- =1000 Kg / m³   Free Unit weight of Water

In this step, we can get the volume of each one of the concrete materials for one cubic meter of the concrete:

-                 The volume of coarse aggregate / 1 m³ concrete

-                  The volume of fine aggregate / 1 m³ concrete

-                 The volume of Cement / 1 m³ concrete

-               The volume of Water / 1 m³ concrete

-               Sum of concrete materials volumes

According to Volume of Drum Mixer, we should calculate the volume of concrete materials for one Drum Mixer batch:

-       The volume of coarse aggregate / 1 unit Drum Mixer batch

-             The volume of fine aggregate / 1 unit Drum Mixer batch

-            The volume of Cement / 1 unit Drum Mixer batch

-           The volume of Water / 1 unit Drum Mixer batch

We should get number of batches:

                      Number of total batches

Now, we can get number of batches for each material of the concrete with using of below formula: 

           

Where:

-                     Each one of the concrete materials (aggregate, cement, water)

-                    Number of batches for each material of the concrete

-                  Number of total batches

-                  Weight of each one of the concrete material / 1 m³ concrete

                        (According to ACI-211 Tables)

-                   Free Unit weight of each one of concrete material

In here, I would like bring a sample as follows:

Sample:

According to ACI-211 Tables, we have obtained amount of materials per one cubic meter of the concrete as follows:

And so, free unit weight of above materials is below cited:

The volume of Drum Mixer and the Volume of the batch sample are:

Therefore, we have:

                   Number of Total batches

Now, we can calculate number of batches for each materials of the concrete:

        Batches number of coarse aggregate

         Batches number of fine aggregate

Batches number of Cement

         Batches number of Water

According to above mentioned, we can execute concrete placing by using of ACI-211 or another standard and volume batching method in small sites where there is not any mechanized or automatic system.

Therefore, we can speak about optimum slump, W/C, quality of concrete even in small building sites.

Small building sites could be meant even when we are using of concrete in our homes.

But we should notice, for producing the concrete with high quality, all of aggregates, cement and water should be tested in laboratory before using of them.

Control phase (C):

In this phase, we should control our solution by preparing the samples of fresh concrete or to place the concrete as the real job at the site. We assume that we have executed about 5000 m3 of fresh concrete at the working place and according to the results of tests; there are 1.2 m3 of fresh concrete as defects incompatible with our solution. We can calculate DPMO (Defects per million opportunities), Sigma Levels as follows:

DPMO = (1.2/ 5000) * 1000000 = 240

The number of DPMO can be converted to the Sigma level. For instance, in this example, 240 DPMO converts to slightly better than a 5 Sigma process.

4.0 Conclusion

Regarding to the examples mentioned in this paper, there are many methods for solving of the problems. At the first, we should know if the problem is actually the problem . It means: Which problem should be solved by us? Further more, we should simplify the complex problem to be perceived easily. Besides,we should know that there are so many ways to solve the problem and we should choose the best one by balancing of Time and Energy (cost).

One of the best ways to solve the problems is to go along step by step as follows:

Step1) To find out exact definition of the problem.

Step2) To make a sentence that is exactly included all of the problem basic concepts (To summarize exact definition of the problem by a sentence).

Step3) To search the guiding channels of knowledge for each word or perfect sentence just like to use of the search engines.

Step4) To select of collected knowledge so that we find out the logical relation among them.

Step5) To find out assumptions, dependent and independent variables (unknowns) by using of Step (4). 

Step6) To establish the differential equations by using of Step (5) and the points A to T mentioned in this paper.

Step7) To solve the differential equations by deleting of many variables (unknowns) so that we must observe balance of the Time and Energy (Cost).

Concerning to above steps, we can use of “Equilibrium Theory” for solving of the problems in the world. Maybe, one day we will be able to find out an opportunity of the Reference Frame with datum coordinates by using of Equilibrium Theory and Returning Analysis. We know that all of Equilibrium systems are the unstable and we must spend the energy for increasing of Equilibrium stability time. 

Every project will smoothly move and be successfully fulfilled the least Time and Energy (Cost), if all of people involved in this project as well as know and accept the target of project. In the circumstances, the attractive concepts similar to Excessive Generosity, Hardworking, Perseverance, Honest, Reliable, Love, Truthfulness and so no will be raised. Of course, it is very hard because we have five cases as follows: 

1)Training: All of people involved in the project should be familiar and learn about the target of the project. 
2)To define the aim of the project (What is the problem): All of people involved in the project should accept the target of the project and it is very difficult (Actually, what is the problem?).

3) To choose the method for internal process. What is the best way to reach our target? How can we measure the best way?

4) Are all people satisfied with the target and output of the project?

What is our strategic plan to satisfy all people such as stakeholders, staff, customers, government, and so on?

5) What area our financial benefits to be obtained of outputs?