U S WEST Implements a Cogent Analytical Model for Optimal Vehicle Replacement

Dennis C. Dietz and Paul A. Katz
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Dennis C. Dietz: Qwest Communications International, 4001 Discovery Drive, Suite 130, Boulder, Colorado 80303
Paul A. Katz: Qwest Communications International

Interfaces, 2001, vol. 31, issue 5, 65-73

Abstract: We developed and implemented a model-based replacement process for a diverse fleet of vehicles at U S WEST, a major telecommunications company (since June 2000, Qwest Communications International). The model considers relevant age-dependent factors, including annual maintenance cost, opportunity cost of downtime, depreciation, and salvage value. It assigns a replacement score to each candidate vehicle based on age, type, estimated replacement cost, and estimated maintenance cost in the next year of operation. The model then rank-orders the vehicles by score and identifies them for replacement subject to a budget constraint on fleet capital expenditure. Through implementation of the model-based process, the company expects an annual benefit of more than $13 million.

Keywords: INVENTORY-PRODUCTION; POLICIES; MAINTENANCE-REPLACEMENT; INDUSTRIES—COMPUTER-ELECTRONIC (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:31:y:2001:i:5:p:65-73

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