15.3 Analysis

15.3.1 Overview

The FHWA Office of Operations developed the Operations B/C Analysis Desk Reference (“the Desk Reference”) to provide guidance on how to conduct B/C analysis for a wide spectrum of TSMO strategies. A B/C analysis is defined in the Desk Reference as a systematic process for calculating and comparing benefits and costs of a project for two purposes:

To determine if it is a sound investment; and

To see how it compares with alternate projects

A B/C analysis estimates the cost-effectiveness of a project by dividing the monetized benefits associated to the project by the costs of implementing and maintaining that project. The resulting cost-effectiveness value is expressed as a ratio or a resultant value. A project with a resultant value greater than one is identified as efficient because the benefits associated with the project are greater than the expected project costs. Projects with a resultant value less than one are deemed inefficient due to the costs outweighing the benefits.

For analyzing TSMO projects, the benefits used in B/C analyses refer to the monetized estimates of the changes in the identified MOEs
for the project that are directly attributable to the project investment. MOEs typically analyze the impacts of TSMO strategies on aspects of traffic operations, such as:

Roadway volumes and speeds;

Number of crashes and crash severity;

Duration of incidents;

Traveler route and mode choice; and

Agency procedures

The costs used in the denominator of the B/C analysis calculations represent the life-cycle costs of implementing, operating, and maintaining the project being analyzed. These life-cycle costs include:

Capital costs;

Operations and maintenance costs;

Replacement costs; and

Annualized costs

A B/C analysis can be used at multiple stages of a project. An analysis can be conducted during the planning phase as an evaluation tool to determine which TSMO strategies are the most cost-effective and beneficial. It can also be used as an assessment tool to evaluate the success of a project once it has been implemented. The results of a B/C analysis Traffic and Safety Analysis Procedures Manual | 2024 15-6 conducted for planning purposes may be less accurate because more assumptions and estimations are involved. A comparison of MOEs before and after a project is implemented leads to a more accurate B/C analysis because the measured impacts of project implementation are known.

15.3.2 Typical Measures of Effectiveness (MOE)

The monetized benefits in a B/C analysis are calculated by applying an established unit value for each MOE and then applying that value to an estimated change in the identified MOEs for the project being analyzed. The MOEs described below are factors often influenced by TSMO and TDM projects and commonly used as a basis for assessing a particular project’s positive or negative impacts.

15.3.2.1 User Travel Time Savings

User travel time is the most used MOE for more traditional capacity-related transportation improvements as well as TSMO projects. User travel time savings refers to the change in the sum of all person hours of travel (PHT) resulting from the implementation of a TSMO project. However, this MOE is a measure of the average, recurring travel time. Many TSMO projects target reducing travel times impacted by nonrecurring factors, such as incidents or construction activity. Because of this, using only this measurement may result in underestimating the benefits of a TSMO project.

Travel time can include time spent inside and/or outside of a vehicle, depending on the mode choice the analysis considers, such as a transit or active transportation alternative. Different monetary values of travel time can also be assigned, depending upon the nature of travel in question. For example, on-the-clock freight vehicle travel time can be assigned a higher monetary value than passenger car leisure travel time.

15.3.2.2 User Vehicle Operating Costs

User vehicle operating cost is also a commonly used MOE for assessing both traditional capacity-related transportation improvements and TSMO projects. User vehicle operating costs can be split up by fuel use or nonfuel use costs. Nonfuel costs include maintenance, insurance, and vehicle depreciation costs. The fuel use MOE is typically estimated by applying a rate of average fuel use to the net change in vehicle miles of travel (VMT).

15.3.2.3 Crashes

Many TSMO projects have been shown to significantly reduce the number of crashes, as well as the severity of vehicular crashes when they do occur. TSMO projects may reduce the chance of crash exposure by smoothing the flow of traffic and alerting drivers of potential interferences. TSMO projects may also reduce the severity of crashes by improving the emergency response to incidents through shorter response times and improved preparedness. The costs associated with crashes include the actual costs, such as medical treatment and property damage, and the cost to avoid, which is an estimate of the value that individuals would be expected to pay to avoid being involved in a crash.

15.3.2.4 Emissions

A more complex MOE used for both traditional capacity-related transportation improvements and TSMO projects is emission levels. The emissions categories typically include hydrocarbons (HC)/reactive organic gases (ROG), nitrogen oxide (NOx), carbon monoxide (CO), carbon dioxide (CO2), particulate matter (PM10) or fine particulate matter (PM2.5), and sulfur dioxide (SO2). Most emissions estimates are based on the application of an emissions rate per VMT. However, emissions rates are sensitive to a variety of variables, such as vehicle speeds and type of vehicle.

15.3.2.5 Emerging MOEs

New MOEs have recently been introduced to B/C analysis to evaluate the effectiveness of emerging TSMO strategies: travel time reliability, incident-related delay, and consumer surplus. These emerging MOEs often provide more justification for TSMO projects, as these MOEs are the focus of many operations deployments.

Travel time reliability is the variability in travel times caused by both nonrecurring and recurring congestion sources.

Incident-related delay includes factors that relate to a facility’s capacity.

Consumer surplus refers to the difference between the amount users are willing to pay in terms of travel costs, including time and money, and how much they pay. Consumer surplus is usually used in the assessment of travel time savings.

15.3.3 Tools for Conducting B/C Analysis

15.3.3.1 Tools for Operations B/C Analysis (TOPS-BC)

The TOPS-BC is an FHWA-developed sketch-level or macroscopic planning and operations B/C decision support tool in the form of an Excel spreadsheet. This tool can be found in Appendix P, Section 2 – External References (Reference 3)
. The guidance provided in the Desk Reference includes the fundamental background information for B/C analysis, while the TOPS-BC user’s manual focuses on the setup and operation of the TOPS-BC spreadsheet. According to the TOPS-BC user’s manual, the TOPS-BC benefit estimation methodology was developed to incorporate the assessment of new MOEs, such as travel time reliability, that are more capable of capturing and analyzing the unique impacts of TSMO strategies.

TOPS-BC can be used to evaluate the cost-effectiveness and potential return on investment of candidate TSMO projects during the early stages of project development. The tool has two key capabilities:

Estimate Life-cycle Costs of TSMO Strategies
– provides a framework and default cost data to estimate the lifecycle costs (including capital, replacement, and continuing operations and maintenance costs) of various TSMO projects.

Conduct Simple Spreadsheet-Based B/C Analysis for Selected TSMO Strategies
– Provides a framework and suggested impact values to conduct B/C analysis for selected strategies.

The Life-cycle cost estimation capability of TOPS-BC provides the capability to estimate the costs of various TSMO strategies. The tool is developed to provide scalable costs dependent on the scope of the user's anticipated deployments. The life-cycle cost estimates include both up front capital costs as well as on-going operations and maintenance (O&M) costs. The tool is also capable of displaying average annual costs and the expected stream of costs over time. Compared to more traditional transportation capacity improvements, TSMO projects typically have a greater proportion of continuous O&M costs, as opposed to upfront capital costs.

The B/C analysis capability enables the user to estimate the potential benefits of various TSMO strategies. TOPS-BC is designed to provide sketch planning estimates of TSMO strategy benefits primarily targeted at fulfilling the needs of practitioners wanting to conduct preliminary screening and initial prioritization of TSMO strategies. These benefits may then be compared with the estimated strategy life-cycle costs to produce the net benefit measures and B/C ratio.

15.3.3.2 Traffic Incident Management B/C (TIM-BC) Tool

The TIM-BC tool enables users to evaluate and compare the monetary value of a wide range of TIM strategies. The guidance provided in the Desk Reference includes the fundamental background information for B/C analysis, while the user’s manual for the TIM-BC tool focuses on the evaluation of operations impacts attributed to the following eight TIM-specific TSMO project types:

Safety Service Patrol;

Driver Removal Laws;

Authority Removal Laws;

Shared Quick Clearance Goals;

Pre-Established Towing Service Agreements;

Dispatch Collocation;

TIM Task Forces; and

SHRP2 TIM Training

To conduct a B/C analysis using the TIM-BC tool, users are recommended to first input basic project-level information, including the project name, State in which the program operates, number of segments the project operates on, duration of the study period, number of annual incidents within the project’s boundaries, and annual total project cost.

The next step of the TIM-BC tool involves segment information for each of the segments identified in the initial project-level input step. This step includes the input of details about the roadway geometry (segment length, number of lanes, general terrain, etc.), program information (operation time and average incident duration savings), traffic information (posted speed limit, traffic volumes, truck percentage), and weather information.

The project output screen displays the tool’s calculated savings for a variety of factors, such as hours of delay, gallons of fuel, number of secondary accidents, and different emissions. The user selects which of these factors the TIMBC tool are used to determine the B/C ratio.

15.3.4 TxDOT Framework for TSMO Project Delivery

The TxDOT TRF Division has developed a TSMO Evaluation Tool, accessible via Appendix P, Section 2 – External References (Reference 4)
The TSMO Evaluation Tool identifies items for consideration that encourage the use of relevant TSMO projects and technologies as part of overall project development. The tool includes checklists for each phase of project delivery. These checklists can be used at each applicable stage of the project delivery process to evaluate opportunities to incorporate TSMO into projects.

Planning phase checklists include lists specifically developed for stakeholder coordination, safety, operations, and technology. Design phase checklists include those specifically developed for the preliminary design concept conference, data collection efforts, and PS&E. Construction phase checklists include lists specifically developed for coordination efforts, technology, and operations. A checklist is also provided for activities to be conducted at project closeout

Additional guidance documents on TSMO and TDM strategies are presented in Appendix P, Section 1 – TSMO and TDM Strategies, Additional Guidance Documents.