Advances in capital replacement modelling with applications
This thesis addresses the capital replacement modelling problems associated with a mixed, or inhomogeneous, fleet and also takes account of the fleet size problem. Applications considered relate to a fleet of buses and a fleet of medical equipment. The initial chapters introduce the notion of capital replacement modelling and review previous work in the field, as well as reviewing the fleet size problem. Replacement policies are also put in the context of the fleet rather than the context of a 'typical plant'. In the third chapter, we present our first attempt to model capital replacement with variable fleet size over a finite planning horizon. A two cycle model is developed in which the notion of penalty cost for breakdown is introduced. This cost is incurred when demand is not met. To take account of the cost of unmet demand, a simple failure model for plant is proposed. The replacement model is applied to a fleet of ventilators in an intensive care unit of a hospital. In the fourth chapter we develop various models for the case of replacement of a sub-fleet within a mixed fleet. These models themselves have variable finite planning horizon of variable length and build on developments described earlier in the thesis. Other aspects such as the increased cost of sub-optimal policy due to delayed replacement, smaller replacement sub-fleet etc. are also considered. The models developed in chapter 4 are applied, in the following chapter, to a fleet of buses operated by a Malaysian inter-city bus company. Sensitivity analysis on different factors is also carried out. Finally the sensitivity of optimal decision policy to the choice of the replacement model is described in the context of the bus application.