TY - JOUR
T1 - A life cycle costing approach for discounting in age and interval replacement optimisation models for civil infrastructure assets
AU - van den Boomen, Martine
AU - Schoenmaker, Rob
AU - Wolfert, Rogier
PY - 2017
Y1 - 2017
N2 - Civil infrastructure assets, such as roads, locks, bridges, treatment plants and storm surge barriers, are often characterised by long service lives and corresponding technical life cycles. When life cycles are long, the time value of money plays a role in asset management decision-making on capital investments and operation and maintenance expenditures. In this paper, a new life cycle costing (LCC) approach for discounting in two classes of maintenance optimisation models is developed. These models are the age replacement model and the interval replacement model. Three well-known LCC techniques, which are the present worth, the capital recovery and the capitalised equivalent worth, are combined and used to develop a stepwise methodology. This methodology is validated with the few case-specific mathematical equations that exist in the literature. The advantage of using this alternative LCC approach is its applicability and flexibility for reliability and maintenance engineers. The resulting LCC method builds on well-known LCC formula and enhances the understanding of the inclusion of discounting principles in reliability models. Understanding these principles makes the method flexible. Practitioners can extend or adapt the method to changing circumstances, such as additional cash flows and altering reliability modelling.
AB - Civil infrastructure assets, such as roads, locks, bridges, treatment plants and storm surge barriers, are often characterised by long service lives and corresponding technical life cycles. When life cycles are long, the time value of money plays a role in asset management decision-making on capital investments and operation and maintenance expenditures. In this paper, a new life cycle costing (LCC) approach for discounting in two classes of maintenance optimisation models is developed. These models are the age replacement model and the interval replacement model. Three well-known LCC techniques, which are the present worth, the capital recovery and the capitalised equivalent worth, are combined and used to develop a stepwise methodology. This methodology is validated with the few case-specific mathematical equations that exist in the literature. The advantage of using this alternative LCC approach is its applicability and flexibility for reliability and maintenance engineers. The resulting LCC method builds on well-known LCC formula and enhances the understanding of the inclusion of discounting principles in reliability models. Understanding these principles makes the method flexible. Practitioners can extend or adapt the method to changing circumstances, such as additional cash flows and altering reliability modelling.
KW - Civil infrastructure assets
KW - discounting
KW - life cycle costing
KW - age replacement
KW - present value
KW - equivalent annual cost
KW - capitalised equivalent worth
UR - http://resolver.tudelft.nl/uuid:b423585d-da13-4a32-9f9b-43057be52faf
U2 - 10.1080/15732479.2017.1329843
DO - 10.1080/15732479.2017.1329843
M3 - Article
SN - 1744-8980
JO - Structure & Infrastructure Engineering: maintenance, management, life-cycle design & performance
JF - Structure & Infrastructure Engineering: maintenance, management, life-cycle design & performance
ER -