Developing green fleet management strategies: Repair/retrofit/replacement decisions under environmental regulation
The considerable cost of maintaining large fleets has generated interest in cost minimization strategies. With many related decisions, numerous constraints, and significant sources of uncertainty (e.g. vehicle breakdowns), fleet managers face complex dynamic optimization problems. Existing methodologies frequently make simplifying assumptions or fail to converge quickly for large problems. This paper presents an approximate dynamic programming approach for making vehicle purchase, resale, and retrofit decisions in a fleet setting with stochastic vehicle breakdowns. Value iteration is informed by dual variables from linear programs, as well as other bounds on vehicle shadow prices. Sample problems are based on a government fleet seeking to comply with emissions regulation. The model predicts the expected cost of compliance, the rules the fleet manager will use in deciding how to comply, and the regulation’s impact on the value of vehicles in the fleet. Stricter regulation lowers the value of some vehicle categories while raising the value of others. Such insights can help guide regulators, as well as the fleet managers they oversee. The methodologies developed could be applied more broadly to general multi-asset replacement problems, many of which have similar structures.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 46 (2012)
Issue (Month): 8 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Suzuki, Yoshinori & Pautsch, Gregory R., 2005. "A vehicle replacement policy for motor carriers in an unsteady economy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(5), pages 463-480, June.
- Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
- Redmer, Adam, 2009. "Optimisation of the exploitation period of individual vehicles in freight transportation companies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(6), pages 978-987, November.
- Guy T. de Ghellinck & Gary D. Eppen, 1967. "Linear Programming Solutions for Separable Markovian Decision Problems," Management Science, INFORMS, vol. 13(5), pages 371-394, January.
- Oliver Gao, H. & Stasko, Timon H., 2009. "Diversification in the driveway: mean-variance optimization for greenhouse gas emissions reduction from the next generation of vehicles," Energy Policy, Elsevier, vol. 37(12), pages 5019-5027, December.
- Simms, B. W. & Lamarre, B. G. & Jardine, A. K. S. & Boudreau, A., 1984. "Optimal buy, operate and sell policies for fleets of vehicles," European Journal of Operational Research, Elsevier, vol. 15(2), pages 183-195, February.
- Nejat Karabakal & Jack R. Lohmann & James C. Bean, 1994. "Parallel Replacement under Capital Rationing Constraints," Management Science, INFORMS, vol. 40(3), pages 305-319, March.
- Jin, Di & Kite-Powell, Hauke L., 2000. "Optimal fleet utilization and replacement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(1), pages 3-20, March.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:46:y:2012:i:8:p:1216-1226. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.