Jason Yao

Criteria for Fleet Management: Identification of Optimal Disposal Points with the Use of Equivalent Uniform Annual Cost

This paper presents a decision model developed to identify the optimal asset life for six equipment classes, including three on road and three off road. This model was developed as an element of a comprehensive study to identify a methodology to evaluate aging (or depreciation), disposal points, and overall utilization. The asset life optimization model discussed in this paper is a core result of that study and presents the opportunity to reduce overall cost, improve the age of the fleet and its readiness to serve the public, and improve overall utilization. This paper examines salvage values and identifies trend models for market value decline on the basis of historical records. With the use of internal cost information, the model identified trends in cost of operation and use as equipment aged. This information was integrated into an optimal economic life model on the basis of equivalent uniform annual cost to identify the optimal disposal point for the six classes. The analytical models developed in the study provide a foundation for long-term analysis of fleet size and the cost-effectiveness of disposal points.