Professional Documents
Culture Documents
)URP:LNLSHGLDWKHIUHHHQF\FORSHGLD
,QFRPSXWHUVFLHQFHDQGLQIRUPDWLRQWKHRU\D+XIIPDQFRGHLVD
SDUWLFXODUW\SHRIRSWLPDOSUHIL[FRGHWKDWLVFRPPRQO\XVHGIRU
ORVVOHVVGDWDFRPSUHVVLRQ7KHSURFHVVRIILQGLQJDQGRUXVLQJVXFKD
FRGHSURFHHGVE\PHDQVRI+XIIPDQFRGLQJDQDOJRULWKP
GHYHORSHGE\'DYLG$+XIIPDQZKLOHKHZDVD3K'VWXGHQWDW
0,7DQGSXEOLVKHGLQWKHSDSHU$0HWKRGIRUWKH
&RQVWUXFWLRQRI0LQLPXP5HGXQGDQF\&RGHV>@
7KHRXWSXWIURP+XIIPDQ
VDOJRULWKPFDQEHYLHZHGDVDYDULDEOH
OHQJWKFRGHWDEOHIRUHQFRGLQJDVRXUFHV\PEROVXFKDVDFKDUDFWHU
LQDILOH7KHDOJRULWKPGHULYHVWKLVWDEOHIURPWKHHVWLPDWHG
SUREDELOLW\RUIUHTXHQF\RIRFFXUUHQFHZHLJKWIRUHDFKSRVVLEOH
YDOXHRIWKHVRXUFHV\PERO$VLQRWKHUHQWURS\HQFRGLQJPHWKRGV
PRUHFRPPRQV\PEROVDUHJHQHUDOO\UHSUHVHQWHGXVLQJIHZHUELWV
WKDQOHVVFRPPRQV\PEROV+XIIPDQ
VPHWKRGFDQEHHIILFLHQWO\
LPSOHPHQWHGILQGLQJDFRGHLQOLQHDUWLPHWRWKHQXPEHURILQSXW
ZHLJKWVLIWKHVHZHLJKWVDUHVRUWHG>@+RZHYHUDOWKRXJKRSWLPDO
DPRQJPHWKRGVHQFRGLQJV\PEROVVHSDUDWHO\+XIIPDQFRGLQJLVQRW
DOZD\VRSWLPDODPRQJDOOFRPSUHVVLRQPHWKRGV
&RQWHQWV
+LVWRU\
7HUPLQRORJ\
3UREOHPGHILQLWLRQ
,QIRUPDOGHVFULSWLRQ
)RUPDOL]HGGHVFULSWLRQ
([DPSOH
%DVLFWHFKQLTXH
&RPSUHVVLRQ
'HFRPSUHVVLRQ
0DLQSURSHUWLHV
2SWLPDOLW\
9DULDWLRQV
QDU\+XIIPDQFRGLQJ
$GDSWLYH+XIIPDQFRGLQJ
+XIIPDQWHPSODWHDOJRULWKP
/HQJWKOLPLWHG+XIIPDQFRGLQJPLQLPXP
YDULDQFH+XIIPDQFRGLQJ
+XIIPDQFRGLQJZLWKXQHTXDOOHWWHUFRVWV
2SWLPDODOSKDEHWLFELQDU\WUHHV+X7XFNHU
FRGLQJ
7KHFDQRQLFDO+XIIPDQFRGH
$SSOLFDWLRQV
6HHDOVR
1RWHV
5HIHUHQFHV
+XIIPDQWUHHJHQHUDWHGIURPWKH
H[DFWIUHTXHQFLHVRIWKHWH[WWKLVLV
DQH[DPSOHRIDKXIIPDQWUHH7KH
IUHTXHQFLHVDQGFRGHVRIHDFK
FKDUDFWHUDUHEHORZ(QFRGLQJWKH
VHQWHQFHZLWKWKLVFRGHUHTXLUHV
ELWVDVRSSRVHGWRRUELWVLI
FKDUDFWHUVRIRUELWVZHUH
XVHG7KLVDVVXPHVWKDWWKHFRGHWUHH
VWUXFWXUHLVNQRZQWRWKHGHFRGHUDQG
WKXVGRHVQRWQHHGWREHFRXQWHGDV
SDUWRIWKHWUDQVPLWWHGLQIRUPDWLRQ
&KDU
)UHT
&RGH
VSDFH
+LVWRU\
,Q'DYLG$+XIIPDQDQGKLV0,7LQIRUPDWLRQWKHRU\FODVVPDWHVZHUHJLYHQWKHFKRLFHRIDWHUP
SDSHURUDILQDOH[DP7KHSURIHVVRU5REHUW0)DQRDVVLJQHGDWHUPSDSHURQWKHSUREOHPRIILQGLQJWKH
PRVWHIILFLHQWELQDU\FRGH+XIIPDQXQDEOHWRSURYHDQ\FRGHVZHUHWKHPRVWHIILFLHQWZDVDERXWWRJLYH
XSDQGVWDUWVWXG\LQJIRUWKHILQDOZKHQKHKLWXSRQWKHLGHDRIXVLQJDIUHTXHQF\VRUWHGELQDU\WUHHDQG
TXLFNO\SURYHGWKLVPHWKRGWKHPRVWHIILFLHQW>@
,QGRLQJVRWKHVWXGHQWRXWGLGKLVSURIHVVRUZKRKDGZRUNHGZLWKLQIRUPDWLRQWKHRU\LQYHQWRU&ODXGH
6KDQQRQWRGHYHORSDVLPLODUFRGH%\EXLOGLQJWKHWUHHIURPWKHERWWRPXSLQVWHDGRIWKHWRSGRZQ
+XIIPDQDYRLGHGWKHPDMRUIODZRIWKHVXERSWLPDO6KDQQRQ)DQRFRGLQJ
7HUPLQRORJ\
+XIIPDQFRGLQJXVHVDVSHFLILFPHWKRGIRUFKRRVLQJWKHUHSUHVHQWDWLRQIRUHDFKV\PEROUHVXOWLQJLQDSUHIL[
FRGHVRPHWLPHVFDOOHGSUHIL[IUHHFRGHVWKDWLVWKHELWVWULQJUHSUHVHQWLQJVRPHSDUWLFXODUV\PEROLV
QHYHUDSUHIL[RIWKHELWVWULQJUHSUHVHQWLQJDQ\RWKHUV\PERO+XIIPDQFRGLQJLVVXFKDZLGHVSUHDGPHWKRG
IRUFUHDWLQJSUHIL[FRGHVWKDWWKHWHUP+XIIPDQFRGHLVZLGHO\XVHGDVDV\QRQ\PIRUSUHIL[FRGHHYHQ
ZKHQVXFKDFRGHLVQRWSURGXFHGE\+XIIPDQ
VDOJRULWKP
3UREOHPGHILQLWLRQ
,QIRUPDOGHVFULSWLRQ
*LYHQ
$VHWRIV\PEROVDQGWKHLUZHLJKWVXVXDOO\SURSRUWLRQDOWR
SUREDELOLWLHV
)LQG
$SUHIL[IUHHELQDU\FRGHDVHWRIFRGHZRUGVZLWKPLQLPXP
H[SHFWHGFRGHZRUGOHQJWKHTXLYDOHQWO\DWUHHZLWKPLQLPXP
ZHLJKWHGSDWKOHQJWKIURPWKHURRW
)RUPDOL]HGGHVFULSWLRQ
,QSXW
$OSKDEHW
ZKLFKLVWKHV\PERODOSKDEHWRI
VL]H
6HW
ZKLFKLVWKHVHWRIWKHSRVLWLYH
V\PEROZHLJKWVXVXDOO\SURSRUWLRQDOWRSUREDELOLWLHVLH
2XWSXW
&RGH
ZKLFKLVWKHWXSOHRI
ELQDU\FRGHZRUGVZKHUH LVWKHFRGHZRUGIRU
&RQVWUXFWLQJD+XIIPDQ7UHH
*RDO
/HW
EHWKHZHLJKWHGSDWKOHQJWKRIFRGH &RQGLWLRQ
IRUDQ\FRGH
([DPSOH
:HJLYHDQH[DPSOHRIWKHUHVXOWRI+XIIPDQFRGLQJIRUDFRGHZLWKILYHZRUGVDQGJLYHQZHLJKWV:HZLOO
QRWYHULI\WKDWLWPLQLPL]HV/RYHUDOOFRGHVLWGRHVRIFRXUVHEXWZHZLOOFRPSXWH/DQGFRPSDUHLWWRWKH
6KDQQRQHQWURS\+RIWKHJLYHQVHWRIZHLJKWVWKHUHVXOWLVQHDUO\RSWLPDO
,QSXW$:
2XWSXW&
6\PERODL
:HLJKWVZL
&RGHZRUGVFL
&RGHZRUGOHQJWKLQELWV
OL
&RQWULEXWLRQWRZHLJKWHGSDWKOHQJWK
OLZL
3UREDELOLW\EXGJHW
OL
2SWLPDOLW\
,QIRUPDWLRQFRQWHQWLQELWV
ORJZL
&RQWULEXWLRQWRHQWURS\
ZLORJZL
6XP
/&
)RUDQ\FRGHWKDWLVELXQLTXHPHDQLQJWKDWWKHFRGHLVXQLTXHO\GHFRGHDEOHWKHVXPRIWKHSUREDELOLW\
EXGJHWVDFURVVDOOV\PEROVLVDOZD\VOHVVWKDQRUHTXDOWRRQH,QWKLVH[DPSOHWKHVXPLVVWULFWO\HTXDOWR
RQHDVDUHVXOWWKHFRGHLVWHUPHGDFRPSOHWHFRGH,IWKLVLVQRWWKHFDVH\RXFDQDOZD\VGHULYHDQ
HTXLYDOHQWFRGHE\DGGLQJH[WUDV\PEROVZLWKDVVRFLDWHGQXOOSUREDELOLWLHVWRPDNHWKHFRGHFRPSOHWH
ZKLOHNHHSLQJLWELXQLTXH
$VGHILQHGE\6KDQQRQWKHLQIRUPDWLRQFRQWHQWKLQELWVRIHDFKV\PERODLZLWKQRQQXOO
SUREDELOLW\LV
1RWH$V\PEROZLWK]HURSUREDELOLW\KDV]HURFRQWULEXWLRQWRWKHHQWURS\VLQFH
6R
IRUVLPSOLFLW\V\PEROVZLWK]HURSUREDELOLW\FDQEHOHIWRXWRIWKHIRUPXODDERYH
$VDFRQVHTXHQFHRI6KDQQRQ
VVRXUFHFRGLQJWKHRUHPWKHHQWURS\LVDPHDVXUHRIWKHVPDOOHVWFRGHZRUG
OHQJWKWKDWLVWKHRUHWLFDOO\SRVVLEOHIRUWKHJLYHQDOSKDEHWZLWKDVVRFLDWHGZHLJKWV,QWKLVH[DPSOHWKH
ZHLJKWHGDYHUDJHFRGHZRUGOHQJWKLVELWVSHUV\PERORQO\VOLJKWO\ODUJHUWKDQWKHFDOFXODWHGHQWURS\RI
ELWVSHUV\PERO6RQRWRQO\LVWKLVFRGHRSWLPDOLQWKHVHQVHWKDWQRRWKHUIHDVLEOHFRGHSHUIRUPV
EHWWHUEXWLWLVYHU\FORVHWRWKHWKHRUHWLFDOOLPLWHVWDEOLVKHGE\6KDQQRQ
,QJHQHUDOD+XIIPDQFRGHQHHGQRWEHXQLTXH7KXVWKHVHWRI+XIIPDQFRGHVIRUDJLYHQSUREDELOLW\
GLVWULEXWLRQLVDQRQHPSW\VXEVHWRIWKHFRGHVPLQLPL]LQJ
IRUWKDWSUREDELOLW\GLVWULEXWLRQ
+RZHYHUIRUHDFKPLQLPL]LQJFRGHZRUGOHQJWKDVVLJQPHQWWKHUHH[LVWVDWOHDVWRQH+XIIPDQFRGHZLWK
WKRVHOHQJWKV
%DVLFWHFKQLTXH
&RPSUHVVLRQ
7KHWHFKQLTXHZRUNVE\FUHDWLQJDELQDU\WUHHRIQRGHV7KHVHFDQEH
VWRUHGLQDUHJXODUDUUD\WKHVL]HRIZKLFKGHSHQGVRQWKHQXPEHURI
V\PEROV $QRGHFDQEHHLWKHUDOHDIQRGHRUDQLQWHUQDOQRGH
,QLWLDOO\DOOQRGHVDUHOHDIQRGHVZKLFKFRQWDLQWKHV\PEROLWVHOI
WKHZHLJKWIUHTXHQF\RIDSSHDUDQFHRIWKHV\PERODQGRSWLRQDOO\D
OLQNWRDSDUHQWQRGHZKLFKPDNHVLWHDV\WRUHDGWKHFRGHLQ
UHYHUVHVWDUWLQJIURPDOHDIQRGH,QWHUQDOQRGHVFRQWDLQV\PERO
ZHLJKWOLQNVWRWZRFKLOGQRGHVDQGWKHRSWLRQDOOLQNWRDSDUHQW
QRGH$VDFRPPRQFRQYHQWLRQELW
UHSUHVHQWVIROORZLQJWKHOHIW
FKLOGDQGELW
UHSUHVHQWVIROORZLQJWKHULJKWFKLOG$ILQLVKHGWUHH
KDVXSWR OHDIQRGHVDQG
LQWHUQDOQRGHV$+XIIPDQWUHH
WKDWRPLWVXQXVHGV\PEROVSURGXFHVWKHPRVWRSWLPDOFRGHOHQJWKV
7KHSURFHVVHVVHQWLDOO\EHJLQVZLWKWKHOHDIQRGHVFRQWDLQLQJWKH
SUREDELOLWLHVRIWKHV\PEROWKH\UHSUHVHQWWKHQDQHZQRGHZKRVH
FKLOGUHQDUHWKHQRGHVZLWKVPDOOHVWSUREDELOLW\LVFUHDWHGVXFKWKDW
WKHQHZQRGH
VSUREDELOLW\LVHTXDOWRWKHVXPRIWKHFKLOGUHQ
V
SUREDELOLW\:LWKWKHSUHYLRXVQRGHVPHUJHGLQWRRQHQRGHWKXV
QRWFRQVLGHULQJWKHPDQ\PRUHDQGZLWKWKHQHZQRGHEHLQJQRZ
FRQVLGHUHGWKHSURFHGXUHLVUHSHDWHGXQWLORQO\RQHQRGHUHPDLQV
WKH+XIIPDQWUHH
7KHVLPSOHVWFRQVWUXFWLRQDOJRULWKPXVHVDSULRULW\TXHXHZKHUHWKH
QRGHZLWKORZHVWSUREDELOLW\LVJLYHQKLJKHVWSULRULW\
&UHDWHDOHDIQRGHIRUHDFKV\PERODQGDGGLWWRWKHSULRULW\
TXHXH
:KLOHWKHUHLVPRUHWKDQRQHQRGHLQWKHTXHXH
5HPRYHWKHWZRQRGHVRIKLJKHVWSULRULW\ORZHVW
SUREDELOLW\IURPWKHTXHXH
&UHDWHDQHZLQWHUQDOQRGHZLWKWKHVHWZRQRGHVDV
FKLOGUHQDQGZLWKSUREDELOLW\HTXDOWRWKHVXPRIWKHWZR
QRGHV
SUREDELOLWLHV
$GGWKHQHZQRGHWRWKHTXHXH
7KHUHPDLQLQJQRGHLVWKHURRWQRGHDQGWKHWUHHLVFRPSOHWH
6LQFHHIILFLHQWSULRULW\TXHXHGDWDVWUXFWXUHVUHTXLUH2ORJQWLPH
SHULQVHUWLRQDQGDWUHHZLWKQOHDYHVKDVQQRGHVWKLVDOJRULWKP
RSHUDWHVLQ2QORJQWLPHZKHUHQLVWKHQXPEHURIV\PEROV
$VRXUFHJHQHUDWHVGLIIHUHQW
V\PEROV
ZLWK
SUREDELOLW\
$
ELQDU\WUHHLVJHQHUDWHGIURPOHIWWR
ULJKWWDNLQJWKHWZROHDVWSUREDEOH
V\PEROVDQGSXWWLQJWKHPWRJHWKHUWR
IRUPDQRWKHUHTXLYDOHQWV\PERO
KDYLQJDSUREDELOLW\WKDWHTXDOVWKH
VXPRIWKHWZRV\PEROV7KHSURFHVV
LVUHSHDWHGXQWLOWKHUHLVMXVWRQH
V\PERO7KHWUHHFDQWKHQEHUHDG
EDFNZDUGVIURPULJKWWROHIW
DVVLJQLQJGLIIHUHQWELWVWRGLIIHUHQW
EUDQFKHV7KHILQDO+XIIPDQFRGHLV
6\PERO &RGH
D
D
D
D
7KHVWDQGDUGZD\WRUHSUHVHQWD
VLJQDOPDGHRIV\PEROVLVE\XVLQJ
ELWVV\PEROEXWWKHHQWURS\RIWKH
VRXUFHLVELWVV\PERO,IWKLV
+XIIPDQFRGHLVXVHGWRUHSUHVHQWWKH
VLJQDOWKHQWKHDYHUDJHOHQJWKLV
ORZHUHGWRELWVV\PEROLWLVVWLOO
IDUIURPWKHWKHRUHWLFDOOLPLWEHFDXVH
WKHSUREDELOLWLHVRIWKHV\PEROVDUH
GLIIHUHQWIURPQHJDWLYHSRZHUVRI
WZR
,IWKHV\PEROVDUHVRUWHGE\SUREDELOLW\WKHUHLVDOLQHDUWLPH2Q
PHWKRGWRFUHDWHD+XIIPDQWUHHXVLQJWZRTXHXHVWKHILUVWRQH
FRQWDLQLQJWKHLQLWLDOZHLJKWVDORQJZLWKSRLQWHUVWRWKHDVVRFLDWHG
OHDYHVDQGFRPELQHGZHLJKWVDORQJZLWKSRLQWHUVWRWKHWUHHVEHLQJSXWLQWKHEDFNRIWKHVHFRQGTXHXH
7KLVDVVXUHVWKDWWKHORZHVWZHLJKWLVDOZD\VNHSWDWWKHIURQWRIRQHRIWKHWZRTXHXHV
6WDUWZLWKDVPDQ\OHDYHVDVWKHUHDUHV\PEROV
(QTXHXHDOOOHDIQRGHVLQWRWKHILUVWTXHXHE\SUREDELOLW\LQLQFUHDVLQJRUGHUVRWKDWWKHOHDVWOLNHO\
LWHPLVLQWKHKHDGRIWKHTXHXH
:KLOHWKHUHLVPRUHWKDQRQHQRGHLQWKHTXHXHV
'HTXHXHWKHWZRQRGHVZLWKWKHORZHVWZHLJKWE\H[DPLQLQJWKHIURQWVRIERWKTXHXHV
&UHDWHDQHZLQWHUQDOQRGHZLWKWKHWZRMXVWUHPRYHGQRGHVDVFKLOGUHQHLWKHUQRGHFDQEH
HLWKHUFKLOGDQGWKHVXPRIWKHLUZHLJKWVDVWKHQHZZHLJKW
(QTXHXHWKHQHZQRGHLQWRWKHUHDURIWKHVHFRQGTXHXH
7KHUHPDLQLQJQRGHLVWKHURRWQRGHWKHWUHHKDVQRZEHHQJHQHUDWHG
$OWKRXJKOLQHDUWLPHJLYHQVRUWHGLQSXWLQWKHJHQHUDOFDVHRIDUELWUDU\LQSXWXVLQJWKLVDOJRULWKPUHTXLUHV
SUHVRUWLQJ7KXVVLQFHVRUWLQJWDNHV2QORJQWLPHLQWKHJHQHUDOFDVHERWKPHWKRGVKDYHWKHVDPH
RYHUDOOFRPSOH[LW\
,QPDQ\FDVHVWLPHFRPSOH[LW\LVQRWYHU\LPSRUWDQWLQWKHFKRLFHRIDOJRULWKPKHUHVLQFHQKHUHLVWKH
QXPEHURIV\PEROVLQWKHDOSKDEHWZKLFKLVW\SLFDOO\DYHU\VPDOOQXPEHUFRPSDUHGWRWKHOHQJWKRIWKH
PHVVDJHWREHHQFRGHGZKHUHDVFRPSOH[LW\DQDO\VLVFRQFHUQVWKHEHKDYLRUZKHQQJURZVWREHYHU\ODUJH
,WLVJHQHUDOO\EHQHILFLDOWRPLQLPL]HWKHYDULDQFHRIFRGHZRUGOHQJWK)RUH[DPSOHDFRPPXQLFDWLRQEXIIHU
UHFHLYLQJ+XIIPDQHQFRGHGGDWDPD\QHHGWREHODUJHUWRGHDOZLWKHVSHFLDOO\ORQJV\PEROVLIWKHWUHHLV
HVSHFLDOO\XQEDODQFHG7RPLQLPL]HYDULDQFHVLPSO\EUHDNWLHVEHWZHHQTXHXHVE\FKRRVLQJWKHLWHPLQWKH
ILUVWTXHXH7KLVPRGLILFDWLRQZLOOUHWDLQWKHPDWKHPDWLFDORSWLPDOLW\RIWKH+XIIPDQFRGLQJZKLOHERWK
PLQLPL]LQJYDULDQFHDQGPLQLPL]LQJWKHOHQJWKRIWKHORQJHVWFKDUDFWHUFRGH
+HUH
VDQH[DPSOHRIRSWLPL]HG+XIIPDQFRGLQJXVLQJWKH)UHQFKVXEMHFWVWULQJM
DLPHDOOHUVXUOHERUGGH
O
HDXOHVMHXGLVRXOHVMRXUVLPSDLUV1RWHWKDWWKHRULJLQDO+XIIPDQFRGLQJWUHHVWUXFWXUHZRXOGEHGLIIHUHQW
IURPWKHJLYHQH[DPSOH
'HFRPSUHVVLRQ
*HQHUDOO\VSHDNLQJWKHSURFHVVRIGHFRPSUHVVLRQLVVLPSO\DPDWWHURIWUDQVODWLQJWKHVWUHDPRISUHIL[FRGHV
WRLQGLYLGXDOE\WHYDOXHVXVXDOO\E\WUDYHUVLQJWKH+XIIPDQWUHHQRGHE\QRGHDVHDFKELWLVUHDGIURPWKH
LQSXWVWUHDPUHDFKLQJDOHDIQRGHQHFHVVDULO\WHUPLQDWHVWKHVHDUFKIRUWKDWSDUWLFXODUE\WHYDOXH%HIRUH
WKLVFDQWDNHSODFHKRZHYHUWKH+XIIPDQWUHHPXVWEHVRPHKRZUHFRQVWUXFWHG,QWKHVLPSOHVWFDVHZKHUH
FKDUDFWHUIUHTXHQFLHVDUHIDLUO\SUHGLFWDEOHWKHWUHHFDQEHSUHFRQVWUXFWHGDQGHYHQVWDWLVWLFDOO\DGMXVWHGRQ
HDFKFRPSUHVVLRQF\FOHDQGWKXVUHXVHGHYHU\WLPHDWWKHH[SHQVHRIDWOHDVWVRPHPHDVXUHRIFRPSUHVVLRQ
HIILFLHQF\2WKHUZLVHWKHLQIRUPDWLRQWRUHFRQVWUXFWWKHWUHHPXVWEHVHQWDSULRUL$QDLYHDSSURDFKPLJKW
EHWRSUHSHQGWKHIUHTXHQF\FRXQWRIHDFKFKDUDFWHUWRWKHFRPSUHVVLRQVWUHDP8QIRUWXQDWHO\WKHRYHUKHDG
LQVXFKDFDVHFRXOGDPRXQWWRVHYHUDONLORE\WHVVRWKLVPHWKRGKDVOLWWOHSUDFWLFDOXVH,IWKHGDWDLV
FRPSUHVVHGXVLQJFDQRQLFDOHQFRGLQJWKHFRPSUHVVLRQPRGHOFDQEHSUHFLVHO\UHFRQVWUXFWHGZLWKMXVW
ELWVRILQIRUPDWLRQZKHUH LVWKHQXPEHURIELWVSHUV\PERO$QRWKHUPHWKRGLVWRVLPSO\SUHSHQGWKH
+XIIPDQWUHHELWE\ELWWRWKHRXWSXWVWUHDP)RUH[DPSOHDVVXPLQJWKDWWKHYDOXHRIUHSUHVHQWVDSDUHQW
QRGHDQGDOHDIQRGHZKHQHYHUWKHODWWHULVHQFRXQWHUHGWKHWUHHEXLOGLQJURXWLQHVLPSO\UHDGVWKHQH[W
ELWVWRGHWHUPLQHWKHFKDUDFWHUYDOXHRIWKDWSDUWLFXODUOHDI7KHSURFHVVFRQWLQXHVUHFXUVLYHO\XQWLOWKHODVW
OHDIQRGHLVUHDFKHGDWWKDWSRLQWWKH+XIIPDQWUHHZLOOWKXVEHIDLWKIXOO\UHFRQVWUXFWHG7KHRYHUKHDGXVLQJ
VXFKDPHWKRGUDQJHVIURPURXJKO\WRE\WHVDVVXPLQJDQELWDOSKDEHW0DQ\RWKHUWHFKQLTXHVDUH
SRVVLEOHDVZHOO,QDQ\FDVHVLQFHWKHFRPSUHVVHGGDWDFDQLQFOXGHXQXVHGWUDLOLQJELWVWKHGHFRPSUHVVRU
PXVWEHDEOHWRGHWHUPLQHZKHQWRVWRSSURGXFLQJRXWSXW7KLVFDQEHDFFRPSOLVKHGE\HLWKHUWUDQVPLWWLQJ
WKHOHQJWKRIWKHGHFRPSUHVVHGGDWDDORQJZLWKWKHFRPSUHVVLRQPRGHORUE\GHILQLQJDVSHFLDOFRGHV\PERO
WRVLJQLI\WKHHQGRILQSXWWKHODWWHUPHWKRGFDQDGYHUVHO\DIIHFWFRGHOHQJWKRSWLPDOLW\KRZHYHU
0DLQSURSHUWLHV
7KHSUREDELOLWLHVXVHGFDQEHJHQHULFRQHVIRUWKHDSSOLFDWLRQGRPDLQWKDWDUHEDVHGRQDYHUDJHH[SHULHQFH
RUWKH\FDQEHWKHDFWXDOIUHTXHQFLHVIRXQGLQWKHWH[WEHLQJFRPSUHVVHG7KLVUHTXLUHVWKDWDIUHTXHQF\WDEOH
PXVWEHVWRUHGZLWKWKHFRPSUHVVHGWH[W6HHWKH'HFRPSUHVVLRQVHFWLRQDERYHIRUPRUHLQIRUPDWLRQDERXW
WKHYDULRXVWHFKQLTXHVHPSOR\HGIRUWKLVSXUSRVH
2SWLPDOLW\
$OWKRXJK+XIIPDQ
VRULJLQDODOJRULWKPLVRSWLPDOIRUDV\PEROE\V\PEROFRGLQJLHDVWUHDPRIXQUHODWHG
V\PEROVZLWKDNQRZQLQSXWSUREDELOLW\GLVWULEXWLRQLWLVQRWRSWLPDOZKHQWKHV\PEROE\V\PERO
UHVWULFWLRQLVGURSSHGRUZKHQWKHSUREDELOLW\PDVVIXQFWLRQVDUHXQNQRZQ$OVRLIV\PEROVDUHQRW
LQGHSHQGHQWDQGLGHQWLFDOO\GLVWULEXWHGDVLQJOHFRGHPD\EHLQVXIILFLHQWIRURSWLPDOLW\2WKHUPHWKRGVVXFK
DVDULWKPHWLFFRGLQJDQG/=:FRGLQJRIWHQKDYHEHWWHUFRPSUHVVLRQFDSDELOLW\%RWKRIWKHVHPHWKRGVFDQ
FRPELQHDQDUELWUDU\QXPEHURIV\PEROVIRUPRUHHIILFLHQWFRGLQJDQGJHQHUDOO\DGDSWWRWKHDFWXDOLQSXW
VWDWLVWLFVXVHIXOZKHQLQSXWSUREDELOLWLHVDUHQRWSUHFLVHO\NQRZQRUYDU\VLJQLILFDQWO\ZLWKLQWKHVWUHDP
+RZHYHUWKHVHPHWKRGVKDYHKLJKHUFRPSXWDWLRQDOFRPSOH[LW\$OVRERWKDULWKPHWLFFRGLQJDQG/=:
ZHUHKLVWRULFDOO\DVXEMHFWRIVRPHFRQFHUQRYHUSDWHQWLVVXHV+RZHYHUDVRIPLGWKHPRVW
FRPPRQO\XVHGWHFKQLTXHVIRUWKHVHDOWHUQDWLYHVWR+XIIPDQFRGLQJKDYHSDVVHGLQWRWKHSXEOLFGRPDLQDV
WKHHDUO\SDWHQWVKDYHH[SLUHG
+RZHYHUWKHOLPLWDWLRQVRI+XIIPDQFRGLQJVKRXOGQRWEHRYHUVWDWHGLWFDQEHXVHGDGDSWLYHO\
DFFRPPRGDWLQJXQNQRZQFKDQJLQJRUFRQWH[WGHSHQGHQWSUREDELOLWLHV,QWKHFDVHRINQRZQLQGHSHQGHQW
DQGLGHQWLFDOO\GLVWULEXWHGUDQGRPYDULDEOHVFRPELQLQJV\PEROVEORFNLQJUHGXFHVLQHIILFLHQF\LQDZD\
WKDWDSSURDFKHVRSWLPDOLW\DVWKHQXPEHURIV\PEROVFRPELQHGLQFUHDVHV+XIIPDQFRGLQJLVRSWLPDOZKHQ
HDFKLQSXWV\PEROLVDNQRZQLQGHSHQGHQWDQGLGHQWLFDOO\GLVWULEXWHGUDQGRPYDULDEOHKDYLQJDSUREDELOLW\
WKDWLVDQWKHLQYHUVHRIDSRZHURIWZR
3UHIL[FRGHVWHQGWRKDYHLQHIILFLHQF\RQVPDOODOSKDEHWVZKHUHSUREDELOLWLHVRIWHQIDOOEHWZHHQWKHVH
RSWLPDOSRLQWV7KHZRUVWFDVHIRU+XIIPDQFRGLQJFDQKDSSHQZKHQWKHSUREDELOLW\RIDV\PEROH[FHHGV
PDNLQJWKHXSSHUOLPLWRILQHIILFLHQF\XQERXQGHG7KHVHVLWXDWLRQVRIWHQUHVSRQGZHOOWRDIRUP
RIEORFNLQJFDOOHGUXQOHQJWKHQFRGLQJIRUWKHVLPSOHFDVHRI%HUQRXOOLSURFHVVHV*RORPEFRGLQJLVD
SUREDEO\RSWLPDOUXQOHQJWKFRGH
)RUDVHWRIV\PEROVZLWKDXQLIRUPSUREDELOLW\GLVWULEXWLRQDQGDQXPEHURIPHPEHUVZKLFKLVDSRZHURI
WZR+XIIPDQFRGLQJLVHTXLYDOHQWWRVLPSOHELQDU\EORFNHQFRGLQJHJ$6&,,FRGLQJ7KLVUHIOHFWVWKH
IDFWWKDWFRPSUHVVLRQLVQRWSRVVLEOHZLWKVXFKDQLQSXW
9DULDWLRQV
0DQ\YDULDWLRQVRI+XIIPDQFRGLQJH[LVWVRPHRIZKLFKXVHD+XIIPDQOLNHDOJRULWKPDQGRWKHUVRIZKLFK
ILQGRSWLPDOSUHIL[FRGHVZKLOHIRUH[DPSOHSXWWLQJGLIIHUHQWUHVWULFWLRQVRQWKHRXWSXW1RWHWKDWLQWKH
ODWWHUFDVHWKHPHWKRGQHHGQRWEH+XIIPDQOLNHDQGLQGHHGQHHGQRWHYHQEHSRO\QRPLDOWLPH$Q
H[KDXVWLYHOLVWRISDSHUVRQ+XIIPDQFRGLQJDQGLWVYDULDWLRQVLVJLYHQE\&RGHDQG3DUVH7UHHVIRU
/RVVOHVV6RXUFH(QFRGLQJ>@KWWSVFKRODUJRRJOHFRPVFKRODU"
KO HQ OU FOXVWHU
QDU\+XIIPDQFRGLQJ
7KHQDU\+XIIPDQDOJRULWKPXVHVWKH^Q`DOSKDEHWWRHQFRGHPHVVDJHDQGEXLOGDQQDU\WUHH
7KLVDSSURDFKZDVFRQVLGHUHGE\+XIIPDQLQKLVRULJLQDOSDSHU7KHVDPHDOJRULWKPDSSOLHVDVIRUELQDU\Q
HTXDOVFRGHVH[FHSWWKDWWKHQOHDVWSUREDEOHV\PEROVDUHWDNHQWRJHWKHULQVWHDGRIMXVWWKHOHDVW
SUREDEOH1RWHWKDWIRUQJUHDWHUWKDQQRWDOOVHWVRIVRXUFHZRUGVFDQSURSHUO\IRUPDQQDU\WUHHIRU
+XIIPDQFRGLQJ,QWKLVFDVHDGGLWLRQDOSUREDELOLW\SODFHKROGHUVPXVWEHDGGHG7KLVLVEHFDXVHWKHWUHH
PXVWIRUPDQQWRFRQWUDFWRUIRUELQDU\FRGLQJWKLVLVDWRFRQWUDFWRUDQGDQ\VL]HGVHWFDQIRUPVXFK
DFRQWUDFWRU,IWKHQXPEHURIVRXUFHZRUGVLVFRQJUXHQWWRPRGXORQWKHQWKHVHWRIVRXUFHZRUGVZLOO
IRUPDSURSHU+XIIPDQWUHH
$GDSWLYH+XIIPDQFRGLQJ
$YDULDWLRQFDOOHGDGDSWLYH+XIIPDQFRGLQJLQYROYHVFDOFXODWLQJWKHSUREDELOLWLHVG\QDPLFDOO\EDVHGRQ
UHFHQWDFWXDOIUHTXHQFLHVLQWKHVHTXHQFHRIVRXUFHV\PEROVDQGFKDQJLQJWKHFRGLQJWUHHVWUXFWXUHWRPDWFK
WKHXSGDWHGSUREDELOLW\HVWLPDWHV,WLVXVHGUDUHO\LQSUDFWLFHVLQFHWKHFRVWRIXSGDWLQJWKHWUHHPDNHVLW
VORZHUWKDQRSWLPL]HGDGDSWLYHDULWKPHWLFFRGLQJWKDWLVPRUHIOH[LEOHDQGKDVDEHWWHUFRPSUHVVLRQ
+XIIPDQWHPSODWHDOJRULWKP
0RVWRIWHQWKHZHLJKWVXVHGLQLPSOHPHQWDWLRQVRI+XIIPDQFRGLQJUHSUHVHQWQXPHULFSUREDELOLWLHVEXWWKH
DOJRULWKPJLYHQDERYHGRHVQRWUHTXLUHWKLVLWUHTXLUHVRQO\WKDWWKHZHLJKWVIRUPDWRWDOO\RUGHUHG
FRPPXWDWLYHPRQRLGPHDQLQJDZD\WRRUGHUZHLJKWVDQGWRDGGWKHP7KH+XIIPDQWHPSODWHDOJRULWKP
HQDEOHVRQHWRXVHDQ\NLQGRIZHLJKWVFRVWVIUHTXHQFLHVSDLUVRIZHLJKWVQRQQXPHULFDOZHLJKWVDQGRQH
RIPDQ\FRPELQLQJPHWKRGVQRWMXVWDGGLWLRQ6XFKDOJRULWKPVFDQVROYHRWKHUPLQLPL]DWLRQSUREOHPV
VXFKDVPLQLPL]LQJ
DSUREOHPILUVWDSSOLHGWRFLUFXLWGHVLJQ
/HQJWKOLPLWHG+XIIPDQFRGLQJPLQLPXPYDULDQFH+XIIPDQFRGLQJ
/HQJWKOLPLWHG+XIIPDQFRGLQJLVDYDULDQWZKHUHWKHJRDOLVVWLOOWRDFKLHYHDPLQLPXPZHLJKWHGSDWK
OHQJWKEXWWKHUHLVDQDGGLWLRQDOUHVWULFWLRQWKDWWKHOHQJWKRIHDFKFRGHZRUGPXVWEHOHVVWKDQDJLYHQ
FRQVWDQW7KHSDFNDJHPHUJHDOJRULWKPVROYHVWKLVSUREOHPZLWKDVLPSOHJUHHG\DSSURDFKYHU\VLPLODUWR
WKDWXVHGE\+XIIPDQ
VDOJRULWKP,WVWLPHFRPSOH[LW\LV
ZKHUH LVWKHPD[LPXPOHQJWKRID
FRGHZRUG1RDOJRULWKPLVNQRZQWRVROYHWKLVSUREOHPLQOLQHDURUOLQHDULWKPLFWLPHXQOLNHWKHSUHVRUWHG
DQGXQVRUWHGFRQYHQWLRQDO+XIIPDQSUREOHPVUHVSHFWLYHO\
+XIIPDQFRGLQJZLWKXQHTXDOOHWWHUFRVWV
,QWKHVWDQGDUG+XIIPDQFRGLQJSUREOHPLWLVDVVXPHGWKDWHDFKV\PEROLQWKHVHWWKDWWKHFRGHZRUGVDUH
FRQVWUXFWHGIURPKDVDQHTXDOFRVWWRWUDQVPLWDFRGHZRUGZKRVHOHQJWKLV1GLJLWVZLOODOZD\VKDYHDFRVW
RI1QRPDWWHUKRZPDQ\RIWKRVHGLJLWVDUHVKRZPDQ\DUHVHWF:KHQZRUNLQJXQGHUWKLV
DVVXPSWLRQPLQLPL]LQJWKHWRWDOFRVWRIWKHPHVVDJHDQGPLQLPL]LQJWKHWRWDOQXPEHURIGLJLWVDUHWKHVDPH
WKLQJ
+XIIPDQFRGLQJZLWKXQHTXDOOHWWHUFRVWVLVWKHJHQHUDOL]DWLRQZLWKRXWWKLVDVVXPSWLRQWKHOHWWHUVRIWKH
HQFRGLQJDOSKDEHWPD\KDYHQRQXQLIRUPOHQJWKVGXHWRFKDUDFWHULVWLFVRIWKHWUDQVPLVVLRQPHGLXP$Q
H[DPSOHLVWKHHQFRGLQJDOSKDEHWRI0RUVHFRGHZKHUHD
GDVK
WDNHVORQJHUWRVHQGWKDQD
GRW
DQG
WKHUHIRUHWKHFRVWRIDGDVKLQWUDQVPLVVLRQWLPHLVKLJKHU7KHJRDOLVVWLOOWRPLQLPL]HWKHZHLJKWHGDYHUDJH
FRGHZRUGOHQJWKEXWLWLVQRORQJHUVXIILFLHQWMXVWWRPLQLPL]HWKHQXPEHURIV\PEROVXVHGE\WKHPHVVDJH
1RDOJRULWKPLVNQRZQWRVROYHWKLVLQWKHVDPHPDQQHURUZLWKWKHVDPHHIILFLHQF\DVFRQYHQWLRQDO
+XIIPDQFRGLQJWKRXJKLWKDVEHHQVROYHGE\.DUS!KWWSLHHH[SORUHLHHHRUJ[SODUWLFOH'HWDLOVMVS"
DUQXPEHU QHZVHDUFK WUXH TXHU\7H[W 0LQLPXP
UHGXQGDQF\FRGLQJIRUWKHGLVFUHWHQRLVHOHVVFKDQQHO!ZKRVHVROXWLRQKDVEHHQ
UHILQHGIRUWKHFDVHRILQWHJHUFRVWVE\*ROLQ!KWWSLHHH[SORUHLHHHRUJ[SODUWLFOH'HWDLOVMVS"
DUQXPEHU TXHU\7H[W G\QDPLFSURJUDPPLQJJROLQFRQVWUXFWLQJRSWLPDOSUHIL[
IUHH QHZVHDUFK WUXH!
2SWLPDODOSKDEHWLFELQDU\WUHHV+X7XFNHUFRGLQJ
,QWKHVWDQGDUG+XIIPDQFRGLQJSUREOHPLWLVDVVXPHGWKDWDQ\FRGHZRUGFDQFRUUHVSRQGWRDQ\LQSXW
V\PERO,QWKHDOSKDEHWLFYHUVLRQWKHDOSKDEHWLFRUGHURILQSXWVDQGRXWSXWVPXVWEHLGHQWLFDO7KXVIRU
H[DPSOH
FRXOGQRWEHDVVLJQHGFRGH
EXWLQVWHDGVKRXOGEH
DVVLJQHGHLWKHU
RU
7KLVLVDOVRNQRZQDVWKH+X
7XFNHUSUREOHPDIWHU7&+XDQG$ODQ7XFNHUWKHDXWKRUVRIWKHSDSHUSUHVHQWLQJWKHILUVWOLQHDULWKPLF
VROXWLRQWRWKLVRSWLPDOELQDU\DOSKDEHWLFSUREOHP>@ZKLFKKDVVRPHVLPLODULWLHVWR+XIIPDQDOJRULWKPEXW
LVQRWDYDULDWLRQRIWKLVDOJRULWKP7KHVHRSWLPDODOSKDEHWLFELQDU\WUHHVDUHRIWHQXVHGDVELQDU\VHDUFK
WUHHV
7KHFDQRQLFDO+XIIPDQFRGH
0DLQDUWLFOH&DQRQLFDO+XIIPDQFRGH
,IZHLJKWVFRUUHVSRQGLQJWRWKHDOSKDEHWLFDOO\RUGHUHGLQSXWVDUHLQQXPHULFDORUGHUWKH+XIIPDQFRGHKDV
WKHVDPHOHQJWKVDVWKHRSWLPDODOSKDEHWLFFRGHZKLFKFDQEHIRXQGIURPFDOFXODWLQJWKHVHOHQJWKV
UHQGHULQJ+X7XFNHUFRGLQJXQQHFHVVDU\7KHFRGHUHVXOWLQJIURPQXPHULFDOO\UHRUGHUHGLQSXWLV
VRPHWLPHVFDOOHGWKHFDQRQLFDO+XIIPDQFRGHDQGLVRIWHQWKHFRGHXVHGLQSUDFWLFHGXHWRHDVHRI
HQFRGLQJGHFRGLQJ7KHWHFKQLTXHIRUILQGLQJWKLVFRGHLVVRPHWLPHVFDOOHG+XIIPDQ6KDQQRQ)DQR
FRGLQJVLQFHLWLVRSWLPDOOLNH+XIIPDQFRGLQJEXWDOSKDEHWLFLQZHLJKWSUREDELOLW\OLNH6KDQQRQ)DQR
FRGLQJ7KH+XIIPDQ6KDQQRQ)DQRFRGHFRUUHVSRQGLQJWRWKHH[DPSOHLV
ZKLFKKDYLQJWKHVDPHFRGHZRUGOHQJWKVDVWKHRULJLQDOVROXWLRQLVDOVRRSWLPDO%XWLQFDQRQLFDO+XIIPDQ
FRGHWKHUHVXOWLV
$SSOLFDWLRQV
$ULWKPHWLFFRGLQJFDQEHYLHZHGDVDJHQHUDOL]DWLRQRI+XIIPDQFRGLQJLQWKHVHQVHWKDWWKH\SURGXFHWKH
VDPHRXWSXWZKHQHYHU\V\PEROKDVDSUREDELOLW\RIWKHIRUPNLQSDUWLFXODULWWHQGVWRRIIHUVLJQLILFDQWO\
EHWWHUFRPSUHVVLRQIRUVPDOODOSKDEHWVL]HV+XIIPDQFRGLQJQHYHUWKHOHVVUHPDLQVLQZLGHXVHEHFDXVHRILWV
VLPSOLFLW\DQGKLJKVSHHG,QWXLWLYHO\DULWKPHWLFFRGLQJFDQRIIHUEHWWHUFRPSUHVVLRQWKDQ+XIIPDQFRGLQJ
EHFDXVHLWVFRGHZRUGVFDQKDYHHIIHFWLYHO\QRQLQWHJHUELWOHQJWKVZKHUHDVFRGHZRUGVLQ+XIIPDQ
FRGLQJFDQRQO\KDYHDQLQWHJHUQXPEHURIELWV7KHUHIRUHWKHUHLVDQLQHIILFLHQF\LQ+XIIPDQFRGLQJZKHUH
DFRGHZRUGRIOHQJWKNRQO\RSWLPDOO\PDWFKHVDV\PERORISUREDELOLW\NDQGRWKHUSUREDELOLWLHVDUHQRW
UHSUHVHQWHGDVRSWLPDOO\ZKHUHDVWKHFRGHZRUGOHQJWKLQDULWKPHWLFFRGLQJFDQEHPDGHWRH[DFWO\PDWFK
WKHWUXHSUREDELOLW\RIWKHV\PERO
+XIIPDQFRGLQJWRGD\LVRIWHQXVHGDVDEDFNHQGWRVRPHRWKHUFRPSUHVVLRQPHWKRGV'()/$7(
3.=,3
VDOJRULWKPDQGPXOWLPHGLDFRGHFVVXFKDV-3(*DQG03KDYHDIURQWHQGPRGHODQGTXDQWL]DWLRQ
IROORZHGE\+XIIPDQFRGLQJRUYDULDEOHOHQJWKSUHIL[IUHHFRGHVZLWKDVLPLODUVWUXFWXUHDOWKRXJKSHUKDSV
QRWQHFHVVDULO\GHVLJQHGE\XVLQJ+XIIPDQ
VDOJRULWKP
6HHDOVR
$GDSWLYH+XIIPDQFRGLQJ
'DWDFRPSUHVVLRQ
*URXSFRPSUHVVLRQ
+XII\XY
/HPSHO=LY:HOFK
0RGLILHG+XIIPDQFRGLQJXVHGLQID[PDFKLQHV
6KDQQRQ)DQRFRGLQJ
9DULFRGH
1RWHV
+XIIPDQ'$0HWKRGIRUWKH&RQVWUXFWLRQRI0LQLPXP
5HGXQGDQF\&RGHV
:LNLPHGLD&RPPRQVKDV
PHGLDUHODWHGWR+XIIPDQ
FRGLQJ
KWWSFRPSUHVVLRQUXGRZQORDGDUWLFOHVKXIIKXIIPDQBBPLQLPXPUHGXQGDQF\FRGHVSGI3')
3URFHHGLQJVRIWKH,5(GRL-5352&
KWWSVG[GRLRUJ)-5352&
9DQ/HHXZHQ-DQ2QWKHFRQVWUXFWLRQRI+XIIPDQWUHHV
KWWSZZZVWDIIVFLHQFHXXQOaOHHXZKXIIPDQSGI3'),&$/35HWULHYHG)HEUXDU\
VHH.HQ+XIIPDQ
+X7&7XFNHU$&2SWLPDO&RPSXWHU6HDUFK7UHHVDQG9DULDEOH/HQJWK$OSKDEHWLFDO&RGHV
6,$0-RXUQDORQ$SSOLHG0DWKHPDWLFVGRL
KWWSVG[GRLRUJ)-6725KWWSVZZZMVWRURUJVWDEOH
5HIHUHQFHV
'$+XIIPDQ$0HWKRGIRUWKH&RQVWUXFWLRQRI0LQLPXP5HGXQGDQF\&RGHV3URFHHGLQJVRIWKH
,5(6HSWHPEHUSS+XIIPDQ
VRULJLQDODUWLFOH
.HQ+XIIPDQ3URILOH'DYLG$+XIIPDQKWWSZZZKXIIPDQFRGLQJFRPP\XQFOHVFLHQWLILF
DPHULFDQ6FLHQWLILF$PHULFDQ6HSWHPEHUSS
7KRPDV+&RUPHQ&KDUOHV(/HLVHUVRQ5RQDOG/5LYHVWDQG&OLIIRUG6WHLQ,QWURGXFWLRQWR
$OJRULWKPV6HFRQG(GLWLRQ0,73UHVVDQG0F*UDZ+LOO,6%16HFWLRQ
SS
5HWULHYHGIURPKWWSVHQZLNLSHGLDRUJZLQGH[SKS"WLWOH +XIIPDQBFRGLQJ ROGLG
&DWHJRULHV LQFRPSXWHUVFLHQFH /RVVOHVVFRPSUHVVLRQDOJRULWKPV %LQDU\WUHHV
7KLVSDJHZDVODVWPRGLILHGRQ6HSWHPEHUDW
7H[WLVDYDLODEOHXQGHUWKH&UHDWLYH&RPPRQV$WWULEXWLRQ6KDUH$OLNH/LFHQVHDGGLWLRQDOWHUPVPD\
DSSO\%\XVLQJWKLVVLWH\RXDJUHHWRWKH7HUPVRI8VHDQG3ULYDF\3ROLF\:LNLSHGLDLVD
UHJLVWHUHGWUDGHPDUNRIWKH:LNLPHGLD)RXQGDWLRQ,QFDQRQSURILWRUJDQL]DWLRQ