Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement (2017)

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Glossary 99 physical assets. Typically, an MMI is set at the level of the hierarchy at which an asset is indi- vidually maintained or at which management decisions to repair, renew, or replace are made. The MMI could be a whole building in some systems, whereas in more sophisticated systems it could be a shaft beading on an electric motor. Best appropriate practice requires that the level of detail in the asset register should allow for the recording of data down to the MMI level. Maintenance Management—Method of allocating resources to accomplish predetermined lev- els of service through planning, budgeting, scheduling, executing, and reporting and review- ing maintenance strategies and tactics. Major Vertical Penetrations—Includes stairs, elevator shafts, utility tunnels, flues, pipe shafts, vertical ducts, and their enclosing walls. Management Strategies—The operations, maintenance, and capital investment strategies determined for the planning period. This may include changes to maintenance strategies to implement more proactive maintenance or could include changes to emergency response plans for specific events. Management Strategy Group (MSG)—Assets of similar type that are managed and maintained in a similar way and have similar patterns of decay. Management System—System to establish policy and objectives and to achieve those objectives. Note that the management system of an organization can include a range of subsets that col- lectively constitute the whole. These subsets usually include the following: • Quality management system • Human resource management system • Fiscal management system • Asset management system • Information management system • Environmental management system Manager, Asset Management Services—Position within an organization that has the respon- sibility for the management of the asset management services team. The team’s role is the implementation of the corporation’s asset management improvement plan. Master Planning—Process of orderly planning a system’s future improvement program that identifies the present and future needs and direction for developing the system’s facilities. Maturity Assessment—Evaluation of the degree to which an organization uses recognized best practices and the availability of information required to plan for, and implement, improve- ments. The ultimate value of maturity assessment can only be realized in the context of an overall process improvement and organizational change program. Maximum Potential Life (MPL)—The maximum length of time of an asset’s life (including the maximum number of rehabilitations possible to extend asset life) up to which either the end of physical life, service life, or economic life (whichever occurs first) dictates that the asset be replaced, given the following definitions: • End of physical life: when an asset physically stops working, collapses, or is otherwise nonoperational • End of service life: when an asset can no longer deliver what customers or regulators require it to deliver (e.g., “customer outrage”) • End of economic life: when an asset ceases to be the lowest cost alternative to satisfy a specified level of performance or service at an acceptable level of risk. Also, the time at which disposal or replacement of the asset results in the greatest cumulative production from the asset per

100 Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement cumulative dollar cost (or the “long-run lowest average cost per unit of production,” where “unit of production” for linear water pipe assets is “availability of water on demand”). Multicriteria Analysis (MCA)—Evaluation by establishing preferences between options by ref- erence to an explicit set of objectives that the decision-making body has identified, and for which it has established measurable criteria to assess the extent to which the objectives have been achieved. N Net Present Value (NPV)—A technique that discounts savings from the project and compares the discounted values to the investment required. OR The sum of the discounted benefit of an option less the sum of the discounted costs. It repre- sents therefore a single figure, which takes account of all relevant future incomes and expen- ditures for that option over the period of analysis. Net Present Worth (NPW)—NPW of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values of the individual cash flows. Non-hub Airport—Commercial service airport that has more than 10,000 passenger boardings each year but less than 0.05 percent of total passenger boardings within the United States in the most current calendar year ending before the start of the current fiscal year. O Operations and Maintenance—Activities related to the performance of routine, preventive, predictive, scheduled, and unscheduled actions aimed at preventing asset failure or decline with the goal of increasing efficiency, reliability, and safety. Optimized Decision Making—An optimization process for considering and prioritizing all options to rectify existing or potential performance failures of assets. Option Evaluation—The process of considering different options in relation to how they per- form against chosen criteria for evaluation. Organizational Change—A process of change in an organization as a result of change in busi- ness processes, organizational structure, or culture within an organization. Organizational Strategic Plan—Overall long-term plan for the organization that is derived from, and embodies, its vision, mission, values, business policies, stakeholder requirements, objectives, and the management of its risks. P PAS (Publicly Available Specification) 55:2008—Asset management standard being used as the basis for development of an ISO standard, which is supported by the American National Standards Institute and the International Infrastructure Management Manual. Passenger Facility Charges (PFC)—A fee imposed by a facility owner, as an airport, on those using the facility; typically added to the cost of a fare. Payback—A technique that looks at how long it takes to recoup initial investment/outlay. Performance Indicator—A qualitative or quantitative measure of service or activity used to compare actual outcome against a standard or other target. Performance measures commonly