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Optimal fleet replacement: A case study on a Spanish urban transport fleet

Author

Listed:
  • J. Riechi

    (Federal Technological University of Paraná)

  • V. Mácian

    (Universitat Politècnica de València)

  • B. Tormos

    (Universitat Politècnica de València)

  • C. Avila

    (Federal Technological University of Paraná)

Abstract

Optimizing the average annual cost of a bus fleet has become an increasing concern in transport companies management around the world. Nowadays, there are many tools available to assist managerial decisions, and one of the most used is the cost analysis of the life cycle of an asset, known as “life cycle cost”. Characterized by performing deterministic analysis of the situation, it allows the administration to evaluate the process of fleet replacement but is limited by not contemplating certain intrinsic variations related to vehicles and for disregarding variables related to exigencies of fleet use. The main purpose of this study is to develop a combined model of support to asset management based in the association of the life cycle cost tool and the mathematical model of Monte Carlo simulation, by performing a stochastic analysis considering both age and average annual mileage for optimum vehicle replacement. The utilized method was applied in a Spanish urban transport fleet, and the results indicate that the use of the stochastic model was more effective than the use of the deterministic model.

Suggested Citation

  • J. Riechi & V. Mácian & B. Tormos & C. Avila, 2017. "Optimal fleet replacement: A case study on a Spanish urban transport fleet," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(8), pages 886-894, August.
    • Handle: RePEc:pal:jorsoc:v:68:y:2017:i:8:d:10.1057_s41274-017-0236-1
    DOI: 10.1057/s41274-017-0236-1
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    References listed on IDEAS

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    4. Zambujal-Oliveira, João & Duque, João, 2011. "Operational asset replacement strategy: A real options approach," European Journal of Operational Research, Elsevier, vol. 210(2), pages 318-325, April.
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