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From page 41...
... P A R T I I Guide for Long-Range Replacement Management
From page 42...
... C O N T E N T S II-3 Chapter 1 Introduction II-3 1.1 Purpose II-3 1.2 Scope II-4 1.3 Organization II-4 1.4 Instructions for Using the Guide II-5 Chapter 2 Key Factors and Processes II-5 2.1 Key Replacement Factors II-5 2.2 Equipment Types II-5 2.3 Appropriate Replacement Criteria per Equipment Type II-6 2.4 Other Considerations II-7 Chapter 3 Rational Processes, Computational Models, and Electronic Tools II-7 3.1 Model Description II-8 3.2 Computational Models II-12 3.3 Description of Electronic Tool II-20 3.4 Data Collection, Processing, and Analysis Procedures for Case Studies II-23 3.5 Challenges, Solutions, and Other Considerations II-24 Chapter 4 Suggestions for Implementation II-24 4.1 General Suggestions for Long-Range Management of Fleet Replacement II-24 4.2 Training in Best Practices II-24 4.3 Future Updates II-24 4.4 Benchmarking Analysis II-25 4.5 Identifying Opportunities to Improve Solutions II-25 4.6 Other Applications
From page 43...
... II-3   1.1 Purpose State highway agencies own and maintain a substantial number of operations equipment assets. These assets are diverse in type and condition.
From page 44...
... II-4 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets and observe the effects of different replacement strategies on their replacement plans and budgets over a long-range period. 1.3 Organization This guide is organized as follows.
From page 45...
... II-5   2.1 Key Replacement Factors A set of influential factors (Table I-3) was used to analyze the long-range replacement plans and budgets of highway operations equipment in the LRM tool.
From page 46...
... II-6 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 2.4 Other Considerations There are other factors affecting long-range replacement plans and budgets in addition to the identified replacement criteria. Such factors -- including demand growth, inflation and depreciation rate, and fuel efficiency reduction factor -- are incorporated into long-range replacement plans in the implemented framework.
From page 47...
... II-7   C H A P T E R   3 3.1 Model Description This section describes the models developed to determine the required funding levels for replacement plans (annually over long-range periods) per equipment class.
From page 48...
... II-8 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets Figure II-1. Proposed process for calculating required funding level over a long-range period.
From page 49...
... Rational Processes, Computational Models, and Electronic Tools II-9   The average salvage value in year t is the arithmetic average of the salvage values of all equipment units in that year. 1 1 ∑=    = v f vti t t i i ft 3.2.3 Replacement Budget The available replacement budget in subsequent year t + 1 was calculated by using the inflation rate to inflate the available replacement budget in year t.
From page 50...
... II-10 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 3.2.5 Operational and Maintenance Cost The operational and maintenance cost of each equipment unit i in year t is the summation of its repair cost, maintenance cost, fixed cost, and fuel cost in that year. = + + +l m k gti ti ti ti tiom The annual operational and maintenance cost per unit is the arithmetic average of the operational and maintenance cost of all equipment units in each year.
From page 51...
... Rational Processes, Computational Models, and Electronic Tools II-11   3.2.11 Obtained Revenue The revenue obtained from salvaged equipment was determined by multiplying the number of units to be salvaged by the average salvage value. Note that the number of salvaged units is equal to the number of units to be replaced plus the number of units that are salvaged with no replacement.
From page 52...
... II-12 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets Finally, utilization u was calculated by multiplying 100 by equipment utilization ut (i.e., accumulated mileage or engine hours) in year t divided by the maximum observed utilization ut.
From page 53...
... Rational Processes, Computational Models, and Electronic Tools II-13   Figure II-2. Long-range replacement planning process.
From page 54...
... II-14 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 3.3.2 Step 2: Enter Equipment Data Manually Once the general information for each type of equipment is entered in Step 1, users enter the data on each equipment unit. The equipment data include the following information: • Equipment class code: The class code defined in the fleet data.
From page 55...
... Rational Processes, Computational Models, and Electronic Tools II-15   The aforementioned fields, in addition to the manual selection of equipment units for replacement, are integrated into six replacement strategies in the LRM tool: 1. Replace using the defined replacement criteria.
From page 56...
... Figure II-3. Details of Strategy 1, "Replace using the dened replacement criteria."
From page 57...
... Figure II-4. Details of Strategy 2, "Replace based on the available replacement budget."
From page 58...
... Figure II-5. Details of Strategy 3, "Replace based on the number of equipment units."
From page 59...
... Figure II-6. Details of Strategy 4, "Combination of replacement criteria and desired number of equipment units."
From page 60...
... II-20 Replacement of Highway Operations Equipment: Formulation of Long-Range Plans and Budgets 3.3.4.5 Strategy 5: Selecting Specific Equipment Units Previous strategies were based on the total number of equipment units that were candidates for replacement in each year identified either by replacement criteria or by the available budget and number of desired equipment units to be replaced. Following such strategies, the tool looks for equipment with the highest replacement scores and identifies candidates for replacement with new equipment.
From page 61...
... Figure II-7. Details of Strategy 5, "Selecting specic equipment units."
From page 62...
... Figure II-8. Details of Strategy 6, "No replacement."
From page 63...
... Rational Processes, Computational Models, and Electronic Tools II-23   3.5 Challenges, Solutions, and Other Considerations The proposed methodology and tool for long-range planning for equipment replacement makes the following assumptions: • The accumulated mileage and engine hours of an equipment unit decrease at a constant rate. • The cost of equipment units (i.e., repair, maintenance, fixed, and fuel costs)
From page 64...
... II-24 4.1 General Suggestions for Long-Range Management of Fleet Replacement Long-range plans for asset investments are very critical, due to the significant financial impacts annually and in the long term. The use of high-quality data can provide more accurate solutions throughout the analyses.
From page 65...
... Suggestions for Implementation II-25   4.5 Identifying Opportunities to Improve Solutions Gathering detailed and high-quality data (e.g., on-demand growth and the inflation rate, among other parameters) could help users obtain more accurate solutions.

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