Building New Companies or Railroads Peer Review

November 26, 2022

Building New Companies or Railroads Peer Review

Order Number	636738393092
Type of Project	ESSAY
Writer Level	PHD VERIFIED
Format	APA
Academic Sources	10
Page Count	3-12 PAGES

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Building New Companies or Railroads Peer Review

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Building, New, Companies, Railroads, Peer, Review

If you were president of one of these railroads, what decision would you make? Maintain current capacity and forgo additional revenue? Make the investment in additional capacity with the assumption that volume will continue to increase? Explain your answer.

I think when choosing to invest, whether it is building a new company or railroads that it can be extremely beneficial if the rate of return is worthwhile. So, research must be done in order to conclude, to include expected returns and the time frame in which to receive these returns. Nowadays, the issue of transportation finance by the government has generated considerable debate. Some people claim that it is more important to spend money on building new railroad destinations.

We can all probably agree with that point, but it is necessary to take into account the advantages and disadvantages of both approaches. In regards to investing for the new railroad, it would not be reasonable for railroads to have too much exposure utilizing building extra tracks and acquiring equipment and wagons to drive additional revenue. Extra investments with an assumption of that volume will continue to increase is a significant risk with no certainty of gaining the investment cost back on top of future increases in revenues. In today’s fluctuating economy, no guarantees are certain

Could there be a shorter-term solution for the railroads other than acquiring more equipment and building more track that would allow them to generate revenue without making significant investments?

There are several paybacks to society from investing in infrastructure, particularly in railroads. By improving the system of roads, bridges, subways as well as railroads, it reduces costs while everything is done in less time. Also, it creates jobs, decreases the unemployment rate. In fact, people would have more money in their pockets, which translates into more consumption.

Nevertheless, there are different variables to take into consideration before even acquiring new equipment. For example, there is external environment a company needs to look into, which includes the following; evaluation of the local taxation market, the competitiveness, political and financial environment, the law and regulatory conditions, the cultural and social backgrounds, and the external stakeholders such as the third parties and customers involved.

It is imperative to ensure that the use of different stakeholders and other external threats or opportunities is adequately evaluated and assessed. However, in terms of the internal environment, it is essential to understand the organization itself by evaluating the company’s strengths, weaknesses, threats and opportunities, market indicators, competitive advances, internal stakeholders, organizational culture, assets, and objectives as well as strategies.

However, with that being said, investment in capital assets has other ramifications or possible consequences not found in the typical day-to-day expenditures of a business. Once funds have been used for the purchase of plant and equipment, it may be a long time before they are recovered. Unwise expenditures of this nature are difficult to retrieve without serious loss to the investor. Need-less to say, imprudent long-term commitments can result in bankruptcy or other financial embarrassment.

ERIC’s POST

Case 6-2 Rail Versus Pipeline Investment

If you were president of one of these railroads, what decision would you make? Maintain current capacity and forgo additional revenue? Make the investment in additional capacity with the assumption that volume will continue to increase? Explain your answer.

As president, I would more than likely maintain current capacity, however, I would take the necessary steps in appointing a team to perform a benefit-cost analysis. The task of building more tracks and acquiring more equipment would require a long-term steady volume investment (Novak et al, 2019, p. 228). Although large investments would meet short-term revenue increases, it would not satisfy the long-term demand, which includes both long-term maintenance and labor cost.

The uncertainty of long-term crude cost, would present a huge risk for the small oil and gas operators in northern regions, which could have a negative impact on the entire industry (Novak et al, p. 228), therefore compiling the information gathered by from a benefit-cost analysis, which monetizes all relevant impacts, would provide a way of comparing options to identify the action that would be most beneficial (bca.transportationeconomics.org).

Could there be a shorter-term solution for the railroads other than acquiring more equipment and building more track that would allow them to generate revenue without making significant investments?

The possible short-term solutions could possibly include; subcontracting to other rail companies with the goal of generating additional revenue, lease additional equipment or cars that could help move product and meet demand while minimizing other factoring cost, and use intermodal transportation,

which is the use of two or more modes, using the best features of multiple modes to deliver service, solutions, and savings to shippers (bgiworldwide.com). Pipelines are not a feasible solution, because the infrastructure in not in place (www.stb.gov).

References

Intermodal transportation. (n.d.). Retrieved April 2, 2020, from https://www.bgiworldwide.com/domestic-freight/rail/

Novack, R. A., Gibson, B. J., Suzuki, Y., & Coyle, J. J. (2019). Transportation: a global supply chain perspective (9th ed.). Boston: Cengage Learning.

Outlook for Rail Crude Oil Transport. (2013, March 14). Retrieved April 2, 2020, from https://www.stb.gov/stb/docs/RETAC/2013/Mar/Crude oil transport.pdf

Transportation Benefit-Cost Analysis. (n.d.). Retrieved April 2, 2020, from http://bca.transportationeconomics.org/home/when-to-use-benefit-cost-analysis.

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Building New Companies or Railroads Peer Review

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Excellent Quality

95-100%

Introduction

45-41 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Literature Support

91-84 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Methodology

58-53 points

With titles for each slide as well as bulleted sections to group relevant information as required, the content is well-organized. Excellent use of typeface, color, images, effects, and so on to improve readability and presenting content. The minimum length criterion of 10 slides/pages is reached.

Average Score

50-85%

40-38 points

More depth/information is required for the context and importance, otherwise the study detail will be unclear. There is no search history information supplied.

83-76 points

There is a review of important theoretical literature, however there is limited integration of research into problem-related ideas. The review is just partly focused and arranged. There is research that both supports and opposes. A summary of the material given is provided. The conclusion may or may not include a biblical integration.

52-49 points

The content is somewhat ordered, but there is no discernible organization. The use of typeface, color, graphics, effects, and so on may sometimes distract from the presenting substance. It is possible that the length criteria will not be reached.

Poor Quality

0-45%

37-1 points

The context and/or importance are lacking. There is no search history information supplied.

75-1 points

There has been an examination of relevant theoretical literature, but still no research concerning problem-related concepts has been synthesized. The review is just somewhat focused and organized. The provided overview of content does not include any supporting or opposing research. The conclusion has no scriptural references.

48-1 points

There is no logical or apparent organizational structure. There is no discernible logical sequence. The use of typeface, color, graphics, effects, and so on often detracts from the presenting substance. It is possible that the length criteria will not be reached.