Optimization of fleet component exchange using the Age Replacement Strategy

To determine the optimum replacement time to public transit vehicle components is a complex task and requires the development and use of a more efficient and thorough strategy than the conventional ‘Replace at Failure’ policy which is widely practiced in the public transportation industry. This paper presents a demonstration of a new methodology called the Age Replacement Strategy, which mathematically locates the optimum replacement age of each component. The optimum replacement age of a component is the point in mileage where the total replacement cost per mile is minimal and this is the criterion on which a replacement decision is based. This optimization method is based on various cost inputs and the vehicle components’ failure probability density function. The Weibull distribution is used to model the distribution of component failure times obtained from the Greater Manchester Passenger Transport Executive in England. The evaluation is then accomplished by first determining how the costs vary with increasing mileages with the effect of inflation considered, and the cost effectiveness of the final results is then analyzed by comparing to that of the ‘Replace at Failure’ policy. With inflation taken into consideration, an optimum replacement mileage is successfully derived for each vehicle component and the Age Replacement Strategy is found to be more cost effective than the ‘Replace at Failure’ policy, provided that a set of real failure data is available and the assessment of cost is accurate.