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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
×
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Suggested Citation:"Part I - Research Overview." National Academies of Sciences, Engineering, and Medicine. 2023. Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets. Washington, DC: The National Academies Press. doi: 10.17226/26937.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

P A R T I Research Overview

C O N T E N T S I-3 Summary I-6 Chapter 1 Introduction I-6 1.1 Background I-7 1.2 Project Objective I-7 1.3 Research Approach I-7 1.4 Organization of the Report I-8 Chapter 2 Research Approach I-8 2.1 Literature Review I-8 2.2 Agency Survey I-8 2.3 Data Collection I-8 2.4 Developing a Methodology for Long-Range Replacement Plans I-11 2.5 Development of the Long-Range Replacement Management Software I-11 2.6 Validating the LRM Software I-12 Chapter 3 Research Findings I-12 3.1 Literature Review I-16 3.2 Agency Survey I-16 3.3 Assessing the Identified Factors and Processes I-17 3.4 Methodology for Long-Range Replacement Plans I-20 3.5 Validating the LRM Tool I-21 Chapter 4 Summary and Suggested Research I-21 4.1 Summary and Conclusion I-22 4.2 Suggested Research I-23 Appendix A Survey I-29 Appendix B Detailed Survey Results I-38 Acronyms I-39 References

I-3   Background Operations equipment assets are critical components for the delivery of state highway agency programs, projects, and services and contribute to a significant portion of capital investments. Operations equipment assets generally deteriorate as they age, resulting in rising operations and maintenance costs and decreasing salvage values. The deterioration conditions and tech- nological changes motivate agencies to periodically replace a portion of their equipment fleet. Operations equipment assets require recurring maintenance, operational expenditures, and timely replacement to retain their value and achieve their anticipated level of performance, reliability, and economy. There is a need for a theoretically sound and practically feasible methodology and a guide for formulating long-range planning for equipment replacement that accommodates the needs and budget constraints of highway agencies. This guide, along with rational processes and an electronic tool, will help operations equipment managers and administrators to make decisions regarding replacement needs and budgets in a long-range horizon accurately, reliably, and conveniently. Objectives The objective of this research was to develop a guide for the formulation of long-range plans and budgets for the replacement of highway operations equipment. The guide includes processes and tools for consideration in making investment decisions. For the purpose of this research, “long range” is defined as 20–25 years. Findings Literature Review and Survey The literature search revealed that there was limited information in the published domain directly related to long-range replacement plans and budgets for operations equipment. This fact highlighted the importance of obtaining relevant information from fleet management practitioners to address knowledge gaps. As a result, a survey was designed and distributed to all state departments of transportation (DOTs) (50 agencies in total). On the basis of the literature review and survey findings, the following factors were found to affect long-range decisions regarding the replacement plans and budgets of highway operations equipment: • Equipment age, • Accumulated utilization, S U M M A R Y Part I: Research Overview

I-4 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets • Replacement budget, • Purchase cost, • Expected useful life, • Age of equipment when acquired, • Repair cost, • Annual utilization, • Maintenance cost, • Criticality, • Physical equipment condition, • Fleet size, • Downtime hours, and • Obsolescence. Required Funding Level for Annual Replacement Plans over a Long-Range Period Defined criteria for equipment replacement were used to determine which equipment units were candidates for replacement in each year over a long-term period (e.g., 25 years). These criteria were defined for each equipment type. The detailed procedure is described below. First, equipment units in the fleet that satisfied the replacement criteria were identified as candidates for replacement in the next year. For instance, any pickup truck with an in-service age of more than 15 years or an accumulated mileage of 150,000 miles was marked as a candi- date for replacement in the next year. Equipment units that would be candidates for replace- ment in the following years (i.e., for the next 25 years) were identified on the basis of the predicted utilization metrics and other key factors in each year. For instance, the in-service age and accumulated mileage of the example pickup truck were estimated in the following years. If either of them exceeded the replacement criteria, the equipment was marked as a candidate for replacement in the future. In the default analysis, the equipment was replaced; however, fleet managers could override this decision. The value of replacement factors needs to be esti- mated over future years (for existing and new equipment units). This process was revisited for each specific equipment unit. Once the number, type, and purchase cost of equipment units were known, the amount required for the annual budget was calculated with financial models that consider inflation rate, depreciation rate, and other identified key factors. Such inputs would help determine how much funding was required for the investment plans annually in a long-range planning horizon. In the calculation of the required budget in the following years, the inflation rate and other market-related and utilization-related factors were incorporated into the calculations to ensure the required funding levels would be calculated accurately over the long-range period. If the available budget changes in a year (or several years), the model will adjust the required funding levels over the years accordingly (on the basis of the observed utilization levels and adjusted replacement criteria, among other key factors) and reflect the impacts on the replace- ment management processes in long-range plans. The steps are detailed below: • At the beginning of each analysis year, input values (including types of equipment, key factors, and replacement criteria) are obtained. • The available budget is compared with the required funding level for that specific year. – If the available funding is enough, the candidate equipment units are identified for replace- ment on the basis of observed replacement factor values in that year and predicted values in the following 25 years. – If the funding level is less than the required budget, the fleet managers adjust the replace- ment criteria or their equipment replacement plan, and the model updates the equipment

Summary I-5   units that are candidates for replacement. Alternatively, the model can identify equipment units that can be replaced within the available budget. For this purpose, the equipment units are ranked on the basis of how much they have exceeded the replacement criteria (actual or estimated in future years), and those with the highest violation are marked as candidates for replacement until the budget is consumed. • The funding level required for the next year and the following years is calculated on the basis of observed and estimated changes in the key factors. Fleet managers need to repeat this process in future years to ensure that more accurate data, rather than estimations, can be entered into the models and processes. Guide for Measurement and Management of Utilization of the Equipment Fleet A guide was developed for the formulation of long-range plans and budgets for highway operations equipment. The guide includes a description of key factors and processes, rational processes and computational models, an electronic tool, data input capabilities, and sugges- tions for implementation, as presented in Part II of this report. The models can be used for long-range plans for replacing operations equipment given different types of operations equipment. The models are embedded in an electronic tool for long-range replacement management (LRM). The LRM tool is designed to call the developed computational models to be used for long-range replacement planning on the basis of the available data. A user manual that details software installation, configuration, and capabilities is presented in Part III of this report.

I-6 1.1 Background State highway agencies own and maintain a substantial number of operations equipment assets that are diverse in type and condition. These assets are critical components for delivering state highway agency programs, projects, and services and contribute to a significant portion of capital investments. Operations equipment assets generally deteriorate as they age, resulting in rising operations and maintenance costs and decreasing salvage values. The deterioration conditions and technological changes motivate agencies to periodically replace a portion of their equipment fleet. These assets require recurring maintenance, operational expenditures, and timely replace- ment to retain their value and achieve their anticipated level of performance, reliability, and economy. Because of practical considerations [also highlighted in NCHRP Research Report 879: Optimal Replacement Cycles of Highway Operations Equipment (1)], budget cuts are often absorbed by the replacement funds as a fast solution to expenditure reduction. However, keeping, operating, and maintaining an aging fleet may cost highway fleet agencies and the public more than a younger fleet in the long run. For instance, maintenance and repair costs of aging equipment increase, as does the equipment’s downtime, directly affecting both service delivery and the capacity to accomplish tasks. Because the service level of old equipment is often limited, increased downtime hours often lead to underperformance or inefficient performance of essential services. Therefore, rather than relying on short-term solutions that may not efficiently save or optimize resources, fleet management forces can be equipped with adequate tools and effective strategies for making and evaluating long-range (i.e., 20–25 years) plans and budgets for the replacement of highway operations equipment. The literature presents various solutions to making investment decisions for highway opera- tions equipment (1, 2). State departments of transportation (DOTs) and highway agencies have used a variety of practices and strategies to make investment decisions for highway operations equipment while taking the diverse classifications of such assets into careful consideration. The existing replacement decision frameworks are usually based on a desire to minimize the total or expected life-cycle fleet costs, including those related to acquisition, operations and main- tenance, and salvage values. Yet, a singular focus on life-cycle costs alone does not reflect the complex needs of managing a DOT fleet over a long-range planning horizon. Although current guidance represents scientific rigor and practical aspects of fleet management strategies, it may not reflect the financial realities of managing a DOT fleet, which often include various fund- ing constraints and changes in operational needs. Therefore, a practically feasible and theoreti- cally sound methodology for determining long-range plans and budgets for the replacement of highway operations equipment is crucial to accommodate the needs and budget constraints of highway agencies. C H A P T E R   1 Introduction

Introduction I-7   1.2 Project Objective The overall objective of this research was to develop a guide for the formulation of long-range plans and budgets for replacement of highway operations equipment. The goal was to include processes and tools for consideration in making investment decisions. For the purpose of this research, “long range” was defined as 20–25 years. 1.3 Research Approach The research included a literature review and survey of state DOTs to identify the factors that contribute to the formulation of long-range plans and budgets for replacement of highway operations equipment as well as practices and processes that merit further consideration or improvement. Additionally, this research included the development of a model for long-range replacement planning and the preparation of the guide and electronic tool. 1.4 Organization of the Report This report has three parts: • Part I, “Research Overview,” which describes the research background (this chapter), research approach (Chapter 2), research findings and applications (Chapter 3), and concludes with a summary and suggestions for future research (Chapter 4); • Part II, “Guide for Long-Range Replacement Management,” which discusses plans and budgets for replacement of highway operations equipment; and • Part III, “User Manual for the Long-Range Replacement Management Tool,” the user manual for the software developed for this project.

I-8 Operations equipment assets typically deteriorate as they age. This leads to increasing operations and maintenance costs and decreasing salvage values. That depreciation and the need to keep pace with technological changes stimulate periodic replacements of a portion of the equipment fleet at various agencies. Operation and maintenance of an aging fleet may cost highway fleet agencies and the public more than a younger fleet in the long run. The service level of old equipment can be limited as well. Thus, rather than relying upon short-term solutions that may not efficiently save or optimize resources, fleet management forces need to be equipped with adequate tools and effective strategies for decision-making and evaluating long-range plans and budgets for the replacement of operations equipment. Accordingly, there is a need to develop a practically feasible and theoretically sound methodology for long-range planning for equipment replacement that accommodates the needs and budget constraints of highway agencies. 2.1 Literature Review A review of the literature was conducted to identify publications relevant both to long-range plan- ning for the replacement of operations equipment and to budget estimation and analyses of what- if scenarios. The literature review identified the best practices and processes that merited further investigation or improvement in this research. It focused on relevant practices and methodologies that help formulate long-range plans for replacement of and budgeting for operations equipment. 2.2 Agency Survey The survey of state DOTs helped identify the factors contributing to long-range plans for replacement needs and budgets for highway operations equipment, the methods and software packages that agencies use in their long-range replacement practices, and the types of highway operations equipment that need to be considered in long-range planning. 2.3 Data Collection The methodology developed in this research was not based on the collected data. Limited data were collected to create case examples to illustrate the use of the proposed processes. 2.4 Developing a Methodology for Long-Range Replacement Plans 2.4.1 Identify the Criteria for Long-Range Fleet Replacement Influential factors and their associated thresholds (user inputs) were used to calculate the replacement needs and budgets for different types of equipment. Age and utilization metrics C H A P T E R   2 Research Approach

Research Approach I-9   (such as mileage) were used, and some optimal replacement criteria were incorporated into the analyses. Fleet managers would have the flexibility to define and use any new suitable criteria (other than the optimal ones) to create what-if scenarios and evaluate the impact of the criteria on the department’s processes annually over a long range. 2.4.2 Calculate the Required Funding Levels for Replacement Plans Annually and over a Long-Range Period Figure I-1 shows the methodology that was implemented to calculate annual required funding over a long-range planning period. The defined criteria were used to determine the equipment units that were candidates for replacement in each year over a long-term period. Criteria were defined for each type of equipment. Several steps were followed to identify the number of equip- ment units of a certain type that were candidates for replacement annually over 25 years: • Equipment units in the fleet that satisfied the replacement criteria were identified as candi- dates for replacement in the next year. • Equipment units that were candidates for replacement in the following years (i.e., for the next 25 years) were identified on the basis of predicted utilization metrics and other key factors in each year. For instance, the in-service age and accumulated mileage of a tandem dump truck would be estimated for subsequent years. If either factor exceeded the replacement criteria, the equipment was marked as a candidate for replacement in the future. In the default analysis, the equipment was to be replaced; however, fleet managers could override this decision. The value of replacement and other factors was estimated over future years, as follows (for both the existing and new equipment units): – Accumulated mileage: The accumulated mileage of an equipment unit in the next year was found by using the accumulated mileage of the equipment unit in the current year and the user-input annual utilization reduction rate. The assumption that utilization of equipment units is reduced by a constant factor in each year was used to calculate the accumulated utilization in the following years. Figure I-1. Proposed process for calculating the required funding level annually over a long range.

I-10 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets – Accumulated engine hours: The accumulated engine hours of an equipment unit in the next year were found by using the accumulated engine hours of the equipment unit in the current year and the user-input annual utilization reduction rate. This analysis is similar to the accu- mulated mileage. – Repair costs in current year: The repair costs of equipment in the next year are equal to the average repair costs of equipment units with the same age in the initial year, adjusted on the basis of the inflation rate. If there were no equipment units with the same age, interpolation and extrapolation techniques were used. – Maintenance cost: The maintenance costs of equipment in the next year are equal to the average maintenance costs of equipment units with the same age in the initial year, adjusted on the basis of the inflation rate. If there were no equipment units with the same age, inter- polation and extrapolation techniques were used. – Fixed cost: The fixed costs of equipment in the next year are equal to the average fixed costs of equipment units with the same age in the initial year, adjusted on the basis of the inflation rate. If there were no equipment units with the same age, interpolation and extrapolation techniques were used. – Fuel cost: The fuel costs of equipment in the next year are equal to the average fuel costs of equipment units with the same age in the initial year, adjusted on the basis of the inflation rate and the fuel efficiency reduction rate. The inflation rate and fuel efficiency reduction rate increase the cost of fuel over the years. As with the previous cases, interpolation and extrapolation techniques were used when there was no equipment unit with the same age. – Physical condition: Fixed age intervals were used to estimate the deterioration of physical condition. The user-input replacement age was divided by five (corresponding to five catego- ries of physical conditions) to determine the time interval in which the physical condition of an equipment unit deteriorates one level. For instance, in 2 years, the physical condition of an equipment unit changes from excellent to very good if the replacement age is 10 years. This process was revisited for each specific equipment unit. Once the number, type, and purchase cost of equipment units were known, the amount required for the annual budget was calculated with financial models that consider inflation rate, depreciation rate, and other key factors. Such inputs help determine how much funding is required for the investment plans annually in a long-range planning horizon. If the available budget changes in a year (or several years), the methodology adjusts the required funding levels over the years accordingly on the basis of the observed utilization levels and adjusted replacement criteria, among other key factors, to reflect the impacts on the replacement manage- ment processes in long-range plans. The steps are detailed below. • Capture inputs: At the beginning of each analysis year, input values (including types of equip- ment, key factors, and replacement criteria) are obtained. • Identify candidate equipment for replacement: The available budget is compared with the required funding level for that specific year. – If the available funding is enough, the equipment units that are candidates for replacement are identified on the basis of the observed replacement factor values in that year and the predicted values for the subsequent 25 years. – If the funding level is less than the required budget, fleet managers can adjust the replace- ment criteria or their equipment replacement plan, and the method updates the equipment units that are candidates for replacement. Alternatively, the method can identify equipment units that can be replaced within the available budget. For this purpose, the equipment units are assigned a replacement score that is based on age, utilization metrics, physical condi- tion, and criticality. Equipment units with the highest score are considered as candidates for replacement. Fleet managers can modify the replacement scores as well as the list of candidate

Research Approach I-11   equipment for replacement. The replacement score is calculated on the basis of the summation of the assigned scores for criticality, physical condition, and utilization over the summation of the user-input replacement decision weights. The assigned scores for criticality, physical condi- tion, and utilization are as follows: 1. Criticality: Very critical (100), critical (50), and not critical (0); 2. Physical condition: Poor (100), fair (75), good (50), very good (25), excellent (0); and 3. Utilization: 100 multiplied by equipment utilization (accumulated mileage or engine hours) over the maximum utilization (accumulated mileage or engine hours). • Calculate required funding level: The required funding level for replacement in each year and subsequent years is calculated on the basis of the number of equipment units to be replaced. 2.4.3 Develop What-If Scenarios The capability to evaluate the results on the basis of changes in the input parameters, such as available budget, fleet composition, and utilization, was provided. Various scenarios were incor- porated into the methodology, along with an evaluation feature. For instance, what if the funding increases in Year 2 and decreases in Year 7? What is the impact on the fleet management processes over the years in the long term? Should a fleet manager replace some equipment units before their replacement criteria are met with the additional budget in Year 2? Fleet managers can create and test their own scenarios to facilitate their decision-making process regarding investments. The scenarios can also address the following: • Impact of changes in available funding (either more or less funding) on the average age and maintenance costs of the fleet class, • Funding required to achieve and maintain a target fleet age by class, and • Long-term impact (cost and availability) of not funding equipment replacement for one or more years. 2.5 Development of the Long-Range Replacement Management Software An Excel-based tool was developed for the presentation and use of the proposed processes. It offers long-range decision-making solutions and can be used by state DOTs to calculate the required funding levels for replacement of operations equipment according to their identified replacement criteria. The long-range replacement management (LRM) tool can be used to evaluate the impact of any replacement-related decisions annually over a long range of analysis. Users can also calculate the cost increase if the replacement is delayed for specific equipment assets, among other scenarios. 2.6 Validating the LRM Software The electronic tool was validated by designing various case studies and hypothetical scenarios to evaluate the tool’s capabilities and ensure they worked properly. Additionally, a systematic valida- tion process was performed to assess the performance of each feature designed in the LRM tool prior to adding more capabilities.

I-12 C H A P T E R   3 This chapter details the findings of the literature review, agency survey, computational models for formulating long-range plans for replacement of and budgeting for highway operations equip- ment, and validation of the tool. 3.1 Literature Review This section presents the findings of the literature review and focuses on the contributing fac- tors and relevant processes. The research team conducted a review of the literature and identified publications that are relevant to long-range planning for the replacement of operations equipment and budget estimation and analysis of what-if scenarios. The review included practices, processes, and methodologies that could relate to the formulation of long-range plans. The literature was revisited to further identify the contributing factors, best practices, and processes that merited further investigation or improvement in this research. 3.1.1 Review of the Published Work The literature presented various solutions to making investment decisions for highway opera- tions equipment (1, 2). A variety of practices and strategies were used by highway agencies to determine effective replacement criteria for operations equipment while taking the diverse classifi- cations of the assets into careful consideration. For instance, as of 2002, Florida has used thresholds for mileage or age to determine equipment replacement priorities. For example, full-size pickups are replaced at 8 years or 95,000 miles and dump trucks at 10 years or either 150,000 or 250,000 miles, depending on capacity (3). Kim et al. (4) conducted a study to improve the Oregon DOT’s existing fleet replacement model. The study confirmed that most DOTs used fixed thresholds as a primary factor in equipment replacement decisions. These fixed thresholds for replacement decisions do not yield the lowest fleet management costs, especially over a long horizon. The Texas DOT has used the Texas Equipment Replacement Model (TERM) to identify equip- ment items as candidates for replacement 1 year in advance. The agency’s equipment operations system (EOS) captures extensive information on all aspects of equipment operations. EOS considers three criteria for replacement: equipment age, life usage expressed in miles (or hours), and life repair costs (adjusted for inflation) relative to original purchase cost (including net adjustment to capital value). In 1997, a SAS decision analysis tool was developed to assist the Texas DOT in its equipment replacement process (3). It is evident that these approaches did not consider fleet management needs over a long-range horizon. Hamilton (1) developed a “guide for optimal replacement cycles of highway operations equip- ment” that identifies a variety of factors that affect replacement decisions, including asset age, utili- zation measures, downtime hours, depreciation, maintenance and repair costs, fuel costs, purchase Research Findings

Research Findings I-13   costs, replacement costs, obsolescence, and time value of money. The guide includes tools and pro- cesses to facilitate decision-making on optimal replacement cycles of on- and off-road highway operations equipment (1). 3.1.2 Summary of the Literature Review Findings 3.1.2.1 Key Factors A set of factors was perceived to be influential in long-range replacement planning. Forty-six documents were reviewed, including technical reports, handbooks (5–7), journal papers, and theses (8, 9). The key factors in equipment management and replacement were perceived to be influential in long-range replacement as well. Table I-1 presents a summary of these factors. 3.1.2.2 Key Processes for Budget Estimation and Analysis of What-If Scenarios State DOTs and transportation agencies often allocate a restricted budget for fleet maintenance and procurement. Some agencies experience a budget shortage to cover such expenses for the fol- lowing fiscal year. A study by Chi et al. (10) revealed that most state governments had applied various cutback-management strategies in the past 2 years to solve their budget deficiency. In an effort to identify those strategies, especially those due to budget reductions, the Council of State Govern- ments surveyed state DOTs on four strategies for dealing with limited budgets: cutback manage- ment, restructuring, privatization, and performance budgeting. Of the state DOTs that used the cutback-management strategy, 22 announced personnel shortages, 19 reported their cuts in spending and supplies, and 14 announced their spending cuts on infrastructure. For instance, Wisconsin stopped purchasing new equipment for the state fleet. Of the state DOTs that used the privatiza- tion strategy, 24 announced an increase in privatization over the past 5 years, and 22 reported more than 10% privatization in their services and programs. Some of these services and programs included construction (mainly highway construction), maintenance, and engineering to provide cost savings. Budget management and resource allocation strategies were used at various agencies to ensure sufficient resources were available to cover the needs. For instance, Maji and Jha (37) used an analytical approach to schedule highway infrastructure maintenance under budget constraints. Mathew et al. (38) and Ngo et al. (39) applied resource allocation techniques with budget con- straints for transit agencies. According to the study by Mathew et al. (38), transit agencies mostly depend on federal funding for maintaining and renewing their transit fleet. Therefore, it is critical to allocate federal funding equitably among agencies to maximize the remaining life of the entire transit fleet. The study by Ngo et al. (39) considered several options for keeping the bus fleet in productive and safe operations within limited funding constraints. Replacing the buses in their service life was the most desirable option for agencies, but the funding limitation made that option less likely. Introducing decision support systems to long-range equipment management systems can reduce a significant amount of the time and effort required to generate what-if scenarios. Numerous combinations of available inventory, fleet configuration, maintenance schedules, the number of purchasing and scrapping equipment units, and the forecasted demand would make manual man- agement systems very inefficient in generating a limited number of scenarios (40). Avramovich et al. (40) developed a decision support system to help fleet managers in making operating deci- sions, planning for fleet configuration, and maximizing the profitability of the company. Thus, it is very beneficial to develop a methodology and its associated tool to help fleet managers design what-if scenarios that facilitate their long-range plans for replacement needs and their opera- tions equipment budgets.

Study Factor H am ilton (1) G hadam et al. (11) W eissm ann et al. (3) Scora (12) Eilon et al. (13) A ronson et al. (14) H artm an (15) Jin et al. (16) K hasnabis et al. (17) List et al. (18) H artm an (19) G illespie et al. (20) M ercier et al. (21) D avenport et al. (22) R edm er (23) Tyler et al. (24) Fan et al. (2) M ørch (8) D rinkw ater et al. (25) Fan et al. (26) G ransberg et al. (27) K im et al. (4) Barringer (28) W yrick et al. (29) Johnson et al. (30) N ichols et al. (6) M itchell Jr. (9) K ayashim a et al. (31) A bdi et al. (32) Jeong et al. (33) Em iliano et al. (34) Turan et al. (35) A hani et al. (36) Equipment type X X X X X X X X X X X X X X X X X X X Equipment age X X X X X X X X X X X X X X X Initial age X X Utilization X X X X X X X X X X X X X X Annual usage X X X Pace of work X Repair cost X X X X X X X X X X X Maintenance cost X X X X X X X X X X X X X X X X X X Downtime hours X X X X X X X Reliability X X X X X X X Budget X X X X X X X Purchase cost X X X X X X X X X X X X X X X X X X X X X Advance deposit X Discount rate X X X X X X X X X Depreciation rate X X X X X X Fuel consumption X X X X X X X X Fuel cost X X X X X X X X X X X Fleet size X X X X X X X Remaining asset value X X X X Salvage value X X X X X X X X X X X Tire cost X X X X Rental income X Working condition X X X Useful life period X X X Table I-1. Summary of the factors relevant to equipment replacement, by reviewed references.

Safety X X X Insurance cost X X X Emission X X X Operator cost X X X X X Operator style X X Physical condition X X Parking cost X X Parts availability X Lead time X X License cost X X X X X Obsolescence X X X X X X X Disposing cost X Criticality X Spare parts inventory X Equipment technology X Researching hours for finding a replacement X Installation cost of new equipment X Training costs for new equipment X Frequency of repairs X Lease cost X Study Factor H am ilton (1) G hadam et al. (11) W eissm ann et al. (3) Scora (12) Eilon et al. (13) A ronson et al. (14) H artm an (15) Jin et al. (16) K hasnabis et al. (17) List et al. (18) H artm an (19) G illespie et al. (20) M ercier et al. (21) D avenport et al. (22) R edm er (23) Tyler et al. (24) Fan et al. (2) M ørch (8) D rinkw ater et al. (25) Fan et al. (26) G ransberg et al. (27) K im et al. (4) Barringer (28) W yrick et al. (29) Johnson et al. (30) N ichols et al. (6) M itchell Jr. (9) K ayashim a et al. (31) A bdi et al. (32) Jeong et al. (33) Em iliano et al. (34) Turan et al. (35) A hani et al. (36) Table I-1. (Continued).

I-16 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 3.2 Agency Survey Different transportation agencies were surveyed on their practices and research studies on long-range plans for replacing fleet equipment and developing budgets to address knowledge gaps identified in the literature. The survey was designed with the following objectives: 1. Identify the factors contributing to the long-range plans for replacement needs and budgets for highway operations equipment, 2. Determine the methods and processes that state agencies use in their long-range replacement practices, 3. Determine the software packages that state agencies use for their long-range replacement prac- tices, and 4. Determine the types of highway operations equipment that need to be considered in long-range planning. The survey questions were developed in Qualtrics (41). The survey was distributed to all the state DOTs. A list of survey questions is included in Appendix A. Of the 50 agencies, 22 DOTs completed and returned the survey (i.e., a response rate of 44%). Figure I-2 shows the distribution of the survey participants in the United States. 3.3 Assessing the Identified Factors and Processes After conducting the literature review, the researcher team analyzed the information and iden- tified key factors that could contribute to the formulation of long-range plans for replacement needs and budgets for highway operations equipment Best practices and processes that merit States that participated in the survey CA UT CO ID MT MN MO MI IN OH WV AR LA ND SD SC FL NH KS KY TN Figure I-2. State DOTs that participated in the survey.

Research Findings I-17   further investigation or improvement were also identified, and the advantages and deficiencies of the existing solutions were discussed. The relevance of factors was evaluated, and factors with more significant effects for use in the formulation of long-range plans for replacement needs and budgets for highway operations equip- ment were identified and recommended. The shortcomings of the identified models, practices, and processes were studied as well. As revealed in the survey findings, many respondents did not use any methods, processes, or tools for long-range replacement plans, and the state DOTs that did faced the disadvantages of using such tools. The collected survey responses provided invaluable information about the importance of long-range decision-making for the budget and different types of equipment as well as the impact of different factors on such managerial decisions. On the basis of the studies considered in the literature review and the evaluation of the survey responses, the types of equipment in Table I-2 were considered for data collection and analysis. Users (e.g., fleet managers) may add other types of equipment for further analyses. The availability of data and the impact of each factor were considered in accordance with the reviewed literature to suggest the most critical factors for further analysis. Table I-3 includes the summary of factors that were considered in this research, as they showed high impacts on long-range plans. The importance of each factor is given in the table as well. 3.4 Methodology for Long-Range Replacement Plans This section explains the incorporation of the proposed methodology into the electronic tool for long-range replacement plans and budgets of operations equipment. The input data include age and utilization as well as repair and maintenance costs. The LRM tool requires a predefined data format for the analyses. The data template accompanies the tool. The process consists of six steps. In the initial steps, users have the option of importing data from a previously prepared data set that is compatible with the required format of the LRM tool. In the absence of such a data set, the data are entered manually, as explained below. • Step 1: Enter fleet data manually. Users enter the data on the types of equipment that are included in the fleet. The data include the characteristics. Additionally, the current analysis year, total analysis years, inflation rate, and desired targets for replacement are specified in this step. No. Type of Equipment No. Type of Equipment 1 Tandem dump 9 Tractor/trailer 2 1-ton crew cab 10 1/2-ton pickup 3 Single-axle dump 11 1/2-ton crew cab 4 3/4-ton crew cab 12 Salt spreader 5 Mechanic shop truck 13 Motor grader 6 Bucket truck 14 Attachments—snow removal 7 Bridge snooper truck 15 Flatbed truck 8 3/4-ton pickup 16 Tractor-mower Table I-2. Types of equipment considered for data collection and long-range replacement analysis.

I-18 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets Frequencya No. Factor Impactb Data Availabilityc Importance 1 Equipment age 86.4 100 Equipment age has a significant impact on all replacement strategies and could be recorded in all agencies. The frequency of responses of “high impact” reveals the importance of equipment age in long-range replacement planning. 2 Accumulated utilization 81.8 81.8 Along with equipment age, accumulated utilization influences operations costs. Availability of data on accumulated utilization and its significant impact on operations costs make it a critical factor in long-range replacement planning. 3 Replacement budget 81.8 68.2 The replacement budget has a significant impact on the ability of each agency to purchase new equipment versus keeping the current fleet size. Moreover, the replacement budget might be uncertain, especially for long-range planning, which makes this factor critical in equipment replacement and budget management. 4 Purchase cost 72.7 100 The purchase cost of equipment units can influence the fleet composition and, therefore, the quality of service. Purchase cost is also one of the major factors that consumes available budgets for equipment replacement, and it was considered in long-range planning. 5 Expected useful life 72.7 81.8 Expected useful life may not be as available as the previous factors; however, the impact of this factor on replacement strategies cannot be neglected. The shortage of data can be compensated for by the manufacturer’s recommendations. 6 Age of equipment when acquired 68.2 95.5 The age of equipment when acquired influences efficiency and replacement costs, similar to equipment age. It also has high data availability. Therefore, it was considered in long- range replacement planning. 7 Repair cost 68.2 95.5 Repair cost is tractable in most state agencies and, due to its significant impact on equipment total cost, it was considered in long-range replacement planning. 8 Annual utilization 68.2 81.8 Annual utilization shows the efficiency as well as the expected cost of utilizing each equipment unit in the fleet. Hence, using this factor helps identify the required budget in long-range replacement planning. 9 Maintenance cost 63.6 90.9 Maintenance cost includes the preventive and regular maintenance cost of each equipment. In long-range analysis, equipment with new technologies may require different maintenance intervals and needs that should be reflected in long-range management policies. High data availability for this factor can provide more accurate replacement planning. 10 Criticality 63.6 40.9 This factor shows the extent to which the equipment is considered essential to the performance of core agency functions directly related to the protection of public and worker safety and asset preservation under emergency conditions. Therefore, despite low data availability, it was considered in long-range planning. 11 Physical condition of equipment 59.1 45.5 Although the availability of data on the physical condition of equipment is low, this factor has a great impact on determining the replacement period for each equipment unit when the budget is limited. The reviewed literature also shows that some state agencies use it as a factor in experience-based replacement decisions. Table I-3. Factors considered for long-range replacement analyses.

Research Findings I-19   Frequencya No. Factor Impactb Data Availabilityc Importance 12 Fleet size 36.4 90.9 The number of equipment units of a certain type in a fleet influences the service they provide as well as the associated costs. Therefore, while less than 40% of respondents marked this factor as “high impact” in long-range planning, it was considered in long-range planning. Data are also available for this factor. 13 Downtime hours 36.4 36.4 An unutilized equipment unit reduces the total utilization of the fleet and increases the maintenance and repair costs of bringing the unit back to service. Maintenance and repair costs have a significant impact on operations cost, and the consideration of downtime hours provides an additional estimation for these costs in long-range analysis. This factor is also closely related to another important factor: the frequency of repairs. Therefore, while only 36.4% of respondents selected downtime hours as a high-impact factor, this factor was considered in long-range planning. 14 18.2 36.4 Obsolescence compatible with new models. Obsolete equipment may not be as efficient as newer equipment to operate. Newer equipment can provide enhanced features in terms of fuel consumption, emission, safety, and technology. In addition, it can be costly to upgrade obsolete equipment to meet new standards. Obsolete equipment may not be utilized in the fleet due to updated law enforcement or lack of parts availability. Therefore, while only 36.4% of respondents selected obsolescence as a high-impact factor for which data availability is low, this factor was considered in long-range analysis. aBased on the responses received in the survey. bNumbers show the frequency of responses selecting “high impact” for including the factor in long-range planning. cNumbers show the frequency of responses selecting “available for all equipment types” in the data availability question. Obsolete equipment may not be technically or economically Table I-3. (Continued). • Step 2: Enter equipment data manually. Once the general information for each type of equip- ment is entered, users enter the data on each equipment unit (e.g., equipment ID, age, accumulated mileage, and repair and maintenance costs). • Step 3: Initialize equipment-level and long-range analyses. After fleet and equipment data are entered, the LRM tool initializes the Excel sheets. This initialization includes preparation of long-range analysis, equipment-level analysis, and fleet funding summary sheets in the LRM tool with the data for the current year. • Step 4: Choose equipment replacement strategy. Users can choose a replacement strategy from the following available options and view the analysis outputs: – Replace using the defined replacement criteria, – Replace based on the available replacement budget, – Replace based on the number of equipment units, and – No replacement. The details of each strategy are discussed in the user manual (Part III of this report). • Step 5: Manual adjustments to replacement strategies. The selected replacement strategies will automatically be applied to all equipment units in the fleet. Users have the option of manually selecting specific equipment units, marking them for replacement, and refreshing the results. • Step 6: Review results. The last step of this framework is viewing the results of the selected replacement strategy. These results include the changes in the equipment units, types of equip- ment (i.e., equipment units within the same class), and fleet funding over the analysis years.

I-20 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 3.5 Validating the LRM Tool The LRM tool offers general solutions for all state DOTs, enabling them to calculate the required funding levels for replacement of operations equipment on the basis of the identified replacement criteria. The tool can be used to evaluate the impact of any replacement-related decisions annually over a long range of analysis. A systematic validation process was used to assess the performance of each feature designed in the LRM tool prior to adding more capabilities. The LRM tool was also validated with various case examples and hypothetical scenarios to assess the tool’s performance and capabilities.

I-21   4.1 Summary and Conclusion The operations and maintenance costs of aging operations equipment increase significantly over time, and their salvage value decreases. Deterioration and technological changes motivate agencies to replace a portion of their equipment fleet continually. This research focused on the development of a theoretically sound and practically feasible methodology and an associated guide to formulating long-range replacement plans and budgets for highway operations equipment. The methodology accounts for the impact of any investment decision in the long run before the fulfillment of any action. Rational processes and an electronic tool were developed to help operations equipment managers and administrators make decisions regarding replacement needs and budgets accurately, reliably, and conveniently in a long-range horizon. First, the research team conducted a comprehensive literature search that revealed limited pub- lished information directly related to long-range replacement plans and budgets for operations equipment. This fact highlighted the importance of obtaining relevant information from fleet man- agement practitioners to address knowledge gaps. Therefore, a survey was designed and distributed to all state DOTs and the District Department of Transportation in Washington, DC, to gain further understanding of the state of practice. The literature review and findings of the state DOT survey revealed a number of factors that affect long-range decisions about replacement plans and budgets for highway operations equipment. A number of types of equipment that were important for long- range replacement planning were identified as well. The developed methodology identifies the equipment units that are candidates for replace- ment in each year over a long-term period (e.g., 25 years) and uses defined criteria for equipment replacement. The methodology and the associated tool replace the candidate equipment unit with a new unit but also give fleet managers the option to override the decision. Once the number, type, and purchase cost of equipment units are known, the amount required for the annual budget is calculated with financial models that consider inflation rate, depreciation rate, and other key factors. Such inputs help determine how much funding is required for the investment plans annually in a long-range planning horizon. The inflation rate and other market- and utilization-related fac- tors were incorporated into the calculations to ensure the required funding levels would be esti- mated accurately over the long-range period. If the available budget changes in a year (or several years), the model adjusts the required funding levels over the years accordingly (on the basis of the observed utilization levels and adjusted replacement criteria, among other key factors) and reflects the impacts on the replacement management processes in long-range plans. The research team also developed a guide for the formulation of long-range plans and budgets for highway operations equipment that includes the description of key factors and processes, rational processes and computational models, an electronic tool, data input capabilities, and rec- ommendations for implementation. The models can be used for long-range plans for replacing C H A P T E R   4 Summary and Suggested Research

I-22 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets operations equipment, given different types of operations equipment, and are embedded in the LRM tool. The tool was designed to call the developed computational models for long-range replacement planning on the basis of the available data. The tool was validated by using existing fleet and equipment data through several case example and what-if scenario evaluations. 4.2 Suggested Research The developed models and tool for long-range analysis required fleet and equipment data as input to offer decision-making insights. Generating new data can be challenging, depending on the structure of the data collected at each agency. Creation of a data-processing component to facilitate this step and provide a fast track for using the tool would be beneficial. Additionally, visual aids could be included for each analysis in the tool to enhance the understanding of the analysis results. Furthermore, a more comprehensive tool can be developed in the future to integrate (a) a life-cycle analysis to determine optimal criteria and timing for replacements, (b) utiliza- tion measurement and management, and (c) long-range plans for replacement and budgets for highway operations equipment or similar assets. Such a comprehensive tool could motivate more potential users to use the capabilities offered in individual tools.

I-23   A P P E N D I X A Survey The survey questions were developed in Qualtrics (41). Then, the survey was distributed to all state DOTs. A snapshot of the survey follows:

I-24 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets

Survey I-25  

I-26 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets

Survey I-27  

I-28 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets

I-29   A P P E N D I X B Figure B-1 shows the annual budget of participating state DOTs for equipment repair, mainte- nance, and purchase. Annual equipment repair and maintenance budgets varied between 1.5 and 40 million dollars, and the purchase budget was between 3.8 and 40 million dollars per year for all respondents. Note that equipment repair and maintenance budgets were not reported for Colorado, Kansas, Minnesota, and Tennessee. For instance, the Tennessee DOT funded its repair and main- tenance costs through rental rates and, therefore, did not report specific budgets for repair and maintenance. Figure B-1 also shows that, in most states, the budget for equipment purchases was higher than the budget for repair and maintenance. B.1 Key Factors and Processes Identified in Published Work This section provides a summary of the influential factors used in equipment management and replacement practices and suggestions for long-range analyses. Table B-1 summarizes the factors extracted from the reviewed documents. This table contains 44 factors along with their definitions. Among the factors in Table B-1, cost-related factors had a significant role in most of the reviewed literature. For instance, life-cycle cost analysis (LCCA) studies use the ownership and operational costs of equipment over a period of time and suggest its optimal life cycle (27). Repair cost limit Detailed Survey Results Av er ag e A nn ua l B ud ge t ( $ m ill io ns ) Figure B-1. State DOT annual budget for equipment repair, maintenance, and purchase.

I-30 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 43 Frequency of repairs Frequency of repairs within a period 44 Lease cost Total or installment payments for leasing equipment No. Factor Definition 1 Equipment type Equipment type, such as truck, loader 2 Equipment age Time in service 3 Initial age Age of equipment when newly acquired 4 Utilization Life-to-date usage based on different criteria, such as mileage, hour 5 Annual usage Total yearly usage in terms of mileage, hour, engine hours 6 Pace of work Working hours per day of equipment 7 Repair cost Life-to-date repair costs, including new parts and labor 8 Maintenance cost Preventive and regular services, including labor and parts 9 Downtime hours Idle hours 10 Reliability Frequency of repairs 11 Budget Budget limitation for replacement 12 Purchase cost Initial paid cost for acquiring equipment 13 Advance deposit Leasing or advance deposit cost 14 Discount rate Minimum interest rate 15 Depreciation rate Market value reduction of equipment due to age, obsolescence 16 Fuel consumption Average daily, monthly, or annual fuel consumption 17 Fuel cost Unit price of fuel 18 Fleet size Size of the fleet for each type of equipment 19 Remaining asset value Current market value of equipment 20 Salvage value Scrap value 21 Tire cost Cost of buying new tires or repairing them 22 Rental income Value of equipment as rental 23 Working condition Working area condition in terms of temperature, terrain 24 Useful life period Life expectancy based on historical data or experience 25 Safety Safety features of a vehicle in terms of brake types, airbags 26 Insurance cost Cost of insurance cost for liability, fire, theft 27 Emission Official policies on the emissions of equipment 28 Operator cost Labor expenses 29 Operator style Operator moral 30 Physical condition Body condition of equipment in terms of damage, rust 31 Parking cost Rental costs of parking 32 Parts availability Availability of repair parts 33 Lead time Time between replacement of an order and delivery of new equipment 34 License cost Cost of renewing license tabs 35 Obsolescence Process of becoming obsolete, outdated, or no longer needed 36 Disposing cost Costs and fees associated with disposing of equipment units 37 Criticality Extent to which equipment is deemed essential to the performance of core agency functions 38 Spare parts inventory Inventory costs for spare parts 39 Equipment technology Improved functionality and efficiency of new equipment 40 Researching hours for finding a replacement Time spent in finding replacement equipment 41 Installation cost of new equipment Labor cost of setting up new equipment for use 42 Training cost for new equipment Cost of training operators to use new equipment Table B-1. Summary of contributing factors to equipment replacement policies.

Detailed Survey Results I-31   policies used the repair frequency and costs of equipment to find a cost limit beyond which vehicles should be replaced (25, 42). Mathematical programming techniques were also used to minimize total costs as an objective function (19). Cost-related factors can be divided into two major groups of ownership and operating factors. The ownership factors are usually fixed costs that are incurred each year, regardless of whether the equipment is operated or not. The main ownership factors are purchase cost, depreciation, discount rate, and insurance cost. The second group of factors is operating costs that are due to the usage of a vehicle and can vary on the basis of their operating hours, equipment type, location, working condition, and age. The main operating factors are repair and maintenance costs and fuel price and consumption. The discussed factors should be considered over the lifetime of the equipment; thus, interest rates and utilization of equipment over time influence such factors. Most existing replacement methods utilized only a few of the factors presented in Table B-1. For instance, Redmer (23) used the discount rate, purchase cost, age, depreciation rate, maintenance cost, fuel price and consumption, utilization, and remaining equipment value in an optimization program to minimize the total operating and ownership costs in a fleet of specialized trucks, trac- tors, and trailers. Johnson et al. (30) surveyed fleet management strategies that are used in the State of Minnesota. Their survey results showed that some counties use a multi-criterion system that ranks equipment on the basis of its age, annual mileage, reliability, maintenance and repair costs, physical condition, and energy efficiency. Gransberg and O’Connor (27) evaluated differ- ent replacement policies by using the dump truck data of the Minneapolis Public Works Fleet Services Division to consider purchase cost, annual usage, salvage value, useful life, depreciation, and tire costs. Accordingly, the data availability, relevance, and importance of factors varied for different types of equipment. The available studies did not consider the effects of future technology on fleet management and budget allocation policies. For instance, the introduction of electric, connected, and autonomous vehicles with different operating characteristics, costs, and utilization capabilities can disrupt long-term decisions. The available approaches are not able to capture such technological trends, and, thus, public and private agencies would have an urgent need for a new and flexible frame- work that can assist them with their fleet management policies. In this research, the factors shown in Table B-2 can be considered. B.2 Key Factors and Processes Identified in Unpublished Work and State Agency Practices Unpublished work was evaluated through a survey of state agencies to identify key factors, currently used processes, and existing software packages. The agency survey aimed to (a) evaluate the importance of factors identified through literature review; (b) investigate the existence of methods, practices, and software packages and their applicability to long-range planning of opera- tions equipment; and (c) identify the list of equipment with significant value to be considered in long-range management practices. The first aim was queried in one question with 31 factors and choices on the impact and data availability of each factor in long-range decision-making practices. Impact was rated as “none,” “little,” or “high.” Data availability was rated as “available for all equipment types,” “available for some equipment types,” or “not available.” The factors shown in Figure B-2 were ranked on the basis of the importance of the factor for long-range planning. The top 10 factors identified by the respondents are summarized in Table B-3. Each column shows the top 10 factors that most state DOTs reported had high, little, or no impact on long-range planning. For instance, equipment age, accumulated utilization,

I-32 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets No. Factor Importance 1 Equipment type Different types of equipment have different functionality, purpose, and costs. Hence, replacement policies should be designed for each type of equipment (or group of similar types) separately for long-range replacement analysis. 2 Equipment age Many replacement policies use an age-based criterion for equipment replacement. Moreover, several other influencing factors, such as maintenance and repair costs and utilization, are correlated with the age of equipment. Hence, it is a significant factor for long-range equipment replacement. 3 Utilization Utilization is a key factor that influences maintenance and repair costs, useful age, and fuel consumption. Thus, this factor should be considered in long-range replacement analysis. 4 Repair cost Repair costs are one of the major recurring costs of operations equipment. This factor can be used to determine whether the benefits of using a unit of equipment surpasses its costs. Several replacement policies rely on this factor for replacement decisions. 5 Maintenance cost Maintenance cost is also a recurring cost of operations equipment. In a long-range analysis, equipment with new technologies may require different maintenance intervals and have needs that should be reflected in the long-range management policies. 6 Downtime hours An unutilized equipment unit reduces the total utilization of the fleet and increases maintenance and repair costs to bring the unit back to the service. Maintenance and repair costs have a significant impact on operations cost, and the consideration of downtime hours provides an additional estimation for these costs in the long-range analysis. 7 Budget One of the main constraints of making replacement decisions is the available budget. This factor directly influences the flexibility of purchasing new equipment or maintaining the fleet size. Therefore, this factor is critical for long-range analysis. 8 Purchase cost Purchase cost is one of the major factors that consumes available budgets for equipment replacement and needs to be considered in long-range planning. 9 Discount rate The value of money varies over time due to inflation, and it affects all monetary costs in an analysis. Therefore, the discount rate is important to consider in a long-range analysis to provide the same benchmark for various costs throughout the years of operation. 10 Depreciation rate The comparison of the remaining value of an equipment unit and its operating cost is one way to find the replacement period. The depreciation rate provides an estimation of the remaining value of each equipment unit and should be included in the long-range analysis. 11 Fuel consumption Fuel consumption affects equipment operating costs, and the advancement of technology may influence fuel consumption. Hence, it is important to consider this factor in the long-range analysis. 12 Fuel cost The unit fuel price and fuel consumption constitute major portions of equipment’s operating costs. This factor is significantly influenced by the global market and alternative fuel sources that can emerge in the future and should be considered in long-range planning. 13 Fleet size The number of equipment units of a certain type in a fleet influences the service they provide as well as the associated costs. Therefore, it needs to be included in long-range planning. 14 Salvage value Salvage value will influence equipment replacement decisions and can be considered in the long- range analysis. 15 Obsolescence Obsolete equipment may not be technically or economically compatible with new equipment. Obsolete equipment may not be as efficient as newer equipment in terms of operations and fuel consumption and the lack of part availability. In addition, it can be costly to upgrade obsolete equipment to meet new standards, such as safety or emission. Therefore, obsolescence needs to be considered in long-range planning. 16 Reliability Frequency of repairs. 17 Physical condition Body condition of equipment in terms of damage and rust. 18 Criticality The extent to which the equipment is deemed essential to the performance of core agency functions. Table B-2. Influential factors in the long-range analysis.

Detailed Survey Results I-33   Figure B-2. Impact of each factor on long-range equipment replacement. Rank Impact Rating enoN elttiL hgiH 1 Equipment age Equipment safety standard Fuel price 2 Accumulated utilization Parts availability Current equipment market value 3 Replacement budget Downtime hours Lease cost 4 Purchase cost Fuel consumption Equipment emission level 5 Expected useful life Equipment technology Researching hours for finding a replacement 6 Annual utilization Frequency of repairs Salvage value 7 Repair cost Physical equipment condition Lead time for a replacement 8 Age of equipment when acquired Fleet size Obsolescence 9 Maintenance cost Equipment emission level Training cost for new equipment 10 Criticality Annual utilization Spare parts inventory Table B-3. Factors with the highest response rates for impact on long-range replacement decisions. and replacement budget were reported as the most inuential factors in long-range equipment management. Most state DOTs reported equipment safety standards, parts availability, and downtime hours as the top three factors with little impact on long-range planning. Fuel price, current equipment market value, and lease cost were the top three factors identied as having no impact on long-range planning. Figure B-3 presents the frequency of responses regarding the availability of data on dierent factors. It also indicates the percentage of data availability for each equipment type. Table B-4 summarizes the factors that had the highest frequency for each data availability rating (i.e., “available for all equipment,” “available for some equipment,” and “not available”). e ranking shown in Table B-4 indicates that equipment age and purchase cost were available for all types of equipment in the participating state DOTs. Physical equipment condition, equipment technology,

I-34 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets Figure B-3. Data availability for each factor. Rank Data Availability Rating Available for all types of equipment Available for some types of equipment Not available 1 Equipment age Physical equipment condition Researching hours for finding a replacement 2 Purchase cost Equipment technology Equipment safety standard 3 Age of equipment when acquired Current equipment market value Equipment emission level 4 Repair cost Criticality Lease cost 5 Fleet size Parts availability Training cost for new equipment 6 Maintenance cost Obsolescence Obsolescence 7 Accumulated utilization Downtime hours Lead time for a replacement 8 Annual utilization Lead time for a replacement Rental cost 9 Expected useful life Rental cost Spare parts inventory 10 Fuel consumption Equipment emission level Parts availability Table B-4. Factors with the highest ratings for data availability. and current equipment market value were available for some types of equipment. The factors that received the highest ratings of not available were researching hours for finding a replacement, equipment safety standards, and equipment emission levels. Survey respondents were asked whether they currently used any processes to make long- range plans for replacement needs and budgets for operations equipment. The responses indi- cated that 15 of 22 agencies utilized state-of-practice processes to make long-range decisions for equipment replacement. Figure B-4 shows the geographical distribution of states using such processes.

Detailed Survey Results I-35   ND MN SD CO MO TN KY NH IN OH LA ID WV SC CA UT MT KS MI FL AR Figure B-4. Use of state-of-practice processes in long-range replacement decisions in the United States. Figure B-5. Processes used by state DOTs for long-range replacement planning. The survey respondents who used a process to make long-range decisions were asked to iden- tify their methodology and the software package(s) they used. Figure B-5 shows five methods that agencies might use to make long-range decisions. Of the different processes, “experience-based judgment” was selected by 67% of respon- dents as the most popular method; “life-cycle cost analysis” was chosen by 60% of state DOTs. “Target threshold” was selected by 53% of respondents and “mathematical modeling” by 33%. Only 27% of respondents chose “commercial software” as a method adopted for long- range planning in their agencies. Table B-5 specifies the state DOTs that used each of the five 0 20 40 60 80 Ex pe rie nc e- ba se d ju dg m en t Li fe -c yc le c os t an al ys is Ta rg et th re sh ol d M at he m at ic al m od el in g m et ho d C om m er ci al so ftw ar e O th er Fr eq ue nc y (% ) Process

I-36 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets Process State DOTs Target threshold Kentucky, Maryland, Colorado, Missouri, Minnesota, North Dakota Experience-based judgment Tennessee, Colorado, Missouri, Louisiana, New Hampshire Life-cycle cost analysis Kentucky, Colorado, Minnesota Mathematical modeling method Colorado, Missouri, North Dakota, Kansas Commercial software Kentucky, Colorado, New Hampshire, North Dakota Table B-5. Key processes used by state DOTs in long-range replacement planning. State DOT Software Name Advantages Disadvantages Kentucky AgileAssets Completely manage, monitor and track the entire fleet — Maryland Maximo Designed specifically for fleet Somewhat of a steep learning curve for operations Colorado dTIMS and AIMS Takes age, utilization, maintenance costs, and criticality into account Does not take condition into account New Hampshire AssetWorks and Excel spreadsheets Data collection Still the need for manual manipulation of data North Dakota AssetWorks, FA Suite, and PeopleSoft — — Indiana Internal analysis tools — — Table B-6. Existing software packages used for replacement planning. processes. Note that each state DOT might use more than one process in making the long- range replacement decision. Table B-6 lists the state DOTs that reported the use of software packages for their long-range plans. As indicated in the table, state DOTs used a variety of packages with different advantages and disadvantages. The responses could confirm the need for the development of a software application that incorporates processes for long-term replacement needs and budgets for highway operations equipment with the flexibility to design and evaluate what-if scenarios. The last aim of the agency survey—to gather information on the importance of long-range plan- ning for each type of equipment defined by National Association of Fleet Administrators (NAFA) classifications—was queried by a question that listed 46 types of equipment; provided ratings options of “not important,” “somehow important,” and “very important”; and included a field in which to respond why it was important. Figure B-6 presents the importance of long-range replacement planning for each type of equip- ment on the basis of the collected responses. For instance, the tandem dump truck was indicated as the most important type of equipment for long-range decision-making—100.0% of respondents rated this equipment type “very important.” The reasons given for this selection by the respond- ing state DOTs included “mission-critical,” “using for snow plowing,” and “moving materials.” The 1-ton crew cab, wheeled loader, and single-axle dump truck followed the tandem dump trucks in terms of importance for long-range decision-making, more than 86.4% of respondents having rated it “very important.” The reasons mentioned for both types of equipment were “mission-critical” and “multi-use equipment.” More than 70% of respondents rated the following equipment as “highly significant” in long-range planning: ¾-ton crew cab, mechanic shop truck, bucket truck, bridge snooper truck, ¾-ton pickup, and tractor/trailer.

Detailed Survey Results I-37   Figure B-6. Importance of long-range replacement planning for each equipment type. As observed in Figure B-6, more than 50% of the respondents selected “attachments-grounds,” “attachments-construction,” “sedan,” and “SUV” as “somehow important” in long-range replace- ment planning due to “ground maintenance” (attachments-grounds), “supporting cabinet operations and being expensive to replace” (attachments-construction), and “leasing from other agencies” (sedans and SUVs).

I-38 DOT department of transportation EOS equipment operations system FHWA Federal Highway Administration LCCA life-cycle cost analysis LRM long-range replacement management NAFA National Association of Fleet Administrators NCSU North Carolina State University TERM Texas Equipment Replacement Model UNCC University of North Carolina at Charlotte Acronyms

I-39   1. R. Hamilton, NCHRP Research Report 879: Optimal Replacement Cycles of Highway Operations Equipment. Transportation Research Board, Washington, DC, 2018. 2. W. Fan, E. Haile, T. Chavez, L. Radley, R. Sorbet, A. Eifert, R. Machemehl, M. Gemar, N. Murshed, and Y. Yu, Equipment Replacement/Retention Decision Making: Final Report (FHWA Report 0-6693-1), 2015. 3. J. Weissmann, A. J. Weissmann, and S. Gona, Computerized Equipment Replacement Methodology, Trans- portation Research Record: Journal of the Transportation Research Board, No. 1824, pp. 77–83, 2003. 4. D. S. Kim, J. D. Porter, P. Kriett, W. Mbugua, and T. Wagner, Fleet Replacement Modeling, Oregon Depart- ment of Transportation, 2009. 5. Heavy Equipment Utilization and Replacement Handbook, U.S. Fish and Wildlife Service, 2015. 6. H. Nichols and D. Day, Moving the Earth: The Workbook of Excavation. McGraw-Hill Professional, 2005. 7. T. Lemerande, Optimizing Fleet Life Cycle Management Decisions Through Graphical Dominance Analysis, in Systems Engineering in Context, Springer, pp. 291–301, 2019. 8. O. Mørch, Optimal Fleet Renewal Plans for a Liner Shipping Company, Institutt for industriell økonomi og teknologiledelse, 2014. 9. Z. W. Mitchell Jr., A Statistical Analysis of Construction Equipment Repair Costs Using Field Data and the Cumulative Cost Model, Virginia Tech, 1998. 10. K. S. Chi, K. A. Arnold, and H. M. Perkins, Trends in State Government Management: Budget Reduction, Restructuring, Privatization and Performance Budgeting, The Book of the States, vol. 35, pp. 419–427, 2003. 11. P. Ghadam, M. Ravanshadnia, and S. Ramezani, Determining Economic Life of Earth Moving Equipment by Using Life Cycle Cost Analysis: Case Study, 2012. Accessed April 15, 2014. https://www.academia.edu/2032383/ Determining_Economic_Life_of_Earth_Moving_Equipment_by_Using_Life_Cycle_Cost_Analysis_Case_ Study 12. G. Scora, Fleet Replacement Method: Evaluation and Refinement, California Department of Transportation, Technical Report, 2017. 13. S. Eilon, J. R. King, and D. E. Hutchinson, A Study in Equipment Replacement, Journal of the Operational Research Society, vol. 17, no. 1, pp. 59–71, 1966. 14. J. E. Aronson and J. S. Aronofsky, Network Generating Models for Equipment Replacement, 1983. http:// scholar.smu.edu/business_workingpapers/60 15. J. C. Hartman, A General Procedure for Incorporating Asset Utilization Decisions into Replacement Analysis, The Engineering Economist, vol. 44, no. 3, pp. 217–238, 1999. 16. D. Jin and H. L. Kite-Powell, Optimal Fleet Utilization and Replacement, Transportation Research Part E: Logistics and Transportation Review, vol. 36, no. 1, pp. 3–20, 2000. 17. S. Khasnabis, J. Bartus, and R. D. Ellis, Asset Management Framework for State Departments of Transportation to Meet Transit Fleet Requirements, Transportation Research Record: Journal of the Transportation Research Board, No. 1835, pp. 74–83, 2003. 18. G. F. List, B. Wood, L. Nozick, M. Turnquist, D. Jones, E. Kjeldgaard, and C. Lawton, Robust Optimization for Fleet Planning under Uncertainty, Transportation Research Part E: Logistics and Transportation Review, vol. 39, no. 3, pp. 209–227, 2003. 19. J. C. Hartman, Multiple Asset Replacement Analysis Under Variable Utilization and Stochastic Demand, European Journal of Operational Research, vol. 159, no. 1, pp. 145–165, Nov. 2004. 20. J. S. Gillespie and A. S. Hyde, The Replace Repair Decision for Heavy Equipment, Virginia Transportation Research Council, 2004. 21. S. Mercier and P. Labeau, Optimal Replacement Policy for a Series System with Obsolescence, Applied Stochastic Models in Business and Industry, vol. 91, October 2002, pp. 73–91, 2004. References

I-40 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 22. N. S. Davenport, M. D. Anderson, and P. A. Farrington, Development and Application of a Vehicle Procurement Model for Rural Fleet Asset Management, Transportation Research Record: Journal of the Transportation Research Board, No. 1927, pp. 123–127, 2005. 23. A. Redmer, Optimisation of the Exploitation Period of Individual Vehicles in Freight Transportation Compa- nies, Transportation Research Part E: Logistics and Transportation Review, vol. 45, no. 6, pp. 978–987, 2009. 24. U. T. Tyler, W. Fan, L. Brown, C. Patterson, M. Winkler, J. Schminkey, K. Western, J. McQuigg, H. Tilley, R. Machemehl, K. Kortum, and M. Gemar, Equipment Replacement Optimization, Technical Report 0-6693-1, Texas Department of Transportation, 2011. 25. R. W. Drinkwater and N. A. Hastings, An Economic Replacement Model, Journal of the Operational Research Society, vol. 18, no. 2, pp. 121–138, 1967. 26. H. Fan and Z. Jin, A Study on the Factors Affecting the Economical Life of Heavy Construction Equipment, Proceedings of the 28th ISARC, pp. 1–2, 2011. 27. D. D. Gransberg and E. P. O’Connor, Major Equipment Life-cycle Cost Analysis, Minnesota Department of Transportation, 2015. 28. H. P. Barringer and T. R. Monroe, How To Justify Machinery Improvements Using Reliability Engineering Principles, Texas A&M University, 1999. 29. D. A. Wyrick and S. Erquicia, Fleet Asset Life Cycle Costing with Intelligent Vehicles, Final Report, University of Minnesota, 2008. 30. A. Johnson, J. Kurth, R. Kuehl, and M. Marti, Fleet Management Tools for Local Agencies, 2018. 31. E. C. Kayashima and U. Marques Junior, LCC Methodology Application for Equipment Replacement Strategy Definition, REM-International Engineering Journal, vol. 72, no. 1, pp. 69–74, 2019. 32. A. Abdi and S. Taghipour, Sustainable Asset Management: A Repair-Replacement Decision Model Consider- ing Environmental Impacts, Maintenance Quality, and Risk, Computers & Industrial Engineering, vol. 136, pp. 117–134, 2019. 33. H. D. Jeong, J. Shane, K. Scheibe, S. Nilakanta, and H. Alikhani, Optimizing Maintenance Equipment Life- Cycle for Local Agencies, Final Report, Iowa Department of Transportation, 2019. 34. W. Emiliano, F. Alvelos, J. Telhada, and E. A. Lanzer, An Optimization Model for Bus Fleet Replacement with Budgetary and Environmental Constraints, Transportation Planning and Technology, vol. 43, pp. 1–15, 2020. 35. H. H. Turan, S. Elsawah, and M. J. Ryan, A Long-Term Fleet Renewal Problem Under Uncertainty: A Simulation-Based Optimization Approach, Expert Systems with Applications, vol. 145, 2020. 36. P. Ahani, A. Arantes, and S. Melo, A Portfolio Approach for Optimal Fleet Replacement Toward Sustain- able Urban Freight Transportation, Transportation Research Part D: Transport and Environment, vol. 48, pp. 357–368, 2016. 37. A. Maji and M. K. Jha, Modeling Highway Infrastructure Maintenance Schedules with Budget Constraints, Transportation Research Record: Journal of the Transportation Research Board, No. 1991, pp. 19–26, 2007. 38. T. V. Mathew, S. Khasnabis, and S. Mishra, Optimal Resource Allocation Among Transit Agencies for Fleet Management, Transportation Research Part A: Policy and Practice, vol. 44, no. 6, pp. 418–432, 2010. 39. H. H. Ngo, R. Shah, and S. Mishra, Optimal Asset Management Strategies for Mixed Transit Fleet, Transpor- tation Research Part A: Policy and Practice, vol. 117, no. May, pp. 103–116, 2018. 40. D. Avramovich, T. M. Cook, G. D. Langston, and F. Sutherland, A Decision Support System for Fleet Manage- ment: A Linear Programming Approach, Interfaces (Providence), vol. 12, no. 3, pp. 1–9, 1982. 41. Qualtrics LLC, Qualtrics Software, Provo, UT, 2019. 42. C. E. Love, A. Rodger, and G. Blazenko, Repair Limit Policies for Vehicle Replacement, INFOR: Information Systems and Operational Research, vol. 20, no. 3, pp. 226–236, 1982.

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State highway agency equipment fleet assets are vital to the delivery of agency programs, projects, and services. These fleets represent a significant capital investment and require recurring maintenance, operational expenditures, and timely replacement to achieve the desired level of performance, reliability, and economy.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 1017: Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets is both a handbook on concepts for making long-range investment decisions and a guide for formulating cost-effective long-range plans for equipment replacement.

Supplemental to the report is a Long-Range Replacement Management tool to support the planning and budgeting processes. Any software included is offered as is, without warranty or promise of support of any kind either expressed or implied. Under no circumstance will the National Academy of Sciences or the Transportation Research Board (collectively “TRB”) be liable for any loss or damage caused by the installation or operation of this product. TRB makes no representation or warranty of any kind, expressed or implied, in fact or in law, including without limitation, the warranty of merchantability or the warranty of fitness for a particular purpose, and shall not in any case be liable for any consequential or special damages.

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