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Asset replacement for an urban railway using a modified two-cycle replacement model

Scarf, PA, Dwight, R, McCusker, A and Chan, A 2007, 'Asset replacement for an urban railway using a modified two-cycle replacement model' , Journal of the Operational Research Society, 58 (9) , pp. 1123-1137. (In Press)

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    Abstract

    This paper considers the application of capital replacement models at Mass Transit Railway Corporation Limited (MTRCL), Hong Kong. A particular characteristic of the replacement problems considered is that costs relating to existing equipment are generally constant or increasing only slowly. Consequently, replacement is often driven by technical obsolescence, but other criteria are used for informing decisions. The applicability of traditional OR models of replacement is then problematic. We recommend the use of a modified two-cycle replacement model and compare this model to existing capital replacement models. Issues relating to the estimation of delay costs and failure consequences and their influence on the replacement decision are also considered—this is done using a fixed horizon model, which is a special case of the modified two-cycle model. Track points and escalators are used as particular examples. In addition to modelling recommendations, we discuss the management of asset replacement with emphasis on the procedures necessary to ensure that asset replacement requirements are considered appropriately and effectively. The paper treats, in particular, the procedural issues of asset replacement, and the discussion of asset replacement system methodology reflects the current practise at MTRCL, Hong Kong, and developments within that organization through collaboration with academia. The modified two-cycle replacement model is recommended by us for general replacement applications. The asset replacement procedure is presented as an exemplar for business and industry.

    Item Type: Article
    Uncontrolled Keywords: capital replacement, two-cycle replacement model, fixed horizon replacement model
    Themes: Subjects / Themes > H Social Sciences > HD Industries. Land use. Labor > HD0028 - 0070 Management. Industrial Management
    Subjects outside of the University Themes
    Schools: Colleges and Schools > College of Business & Law > Salford Business School > Operations and Global Logistics Management
    Journal or Publication Title: Journal of the Operational Research Society
    Publisher: Palgrave Macmillan
    Refereed: Yes
    ISSN: 01605682
    Depositing User: H Kenna
    Date Deposited: 21 Aug 2007 16:32
    Last Modified: 20 Aug 2013 16:46
    URI: http://usir.salford.ac.uk/id/eprint/280

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