Optimal resource allocation for the purchase of new buses and the rebuilding of existing buses as a part of a transit asset management strategy for state DOTs

Abstract

State Departments of Transportation (DOT) that provide much of the matching support to local transit agencies required for federal funding for the purchase of new buses, are duly concerned about the escalating costs of new buses and the lack of sufficient funds to keep up with their replacement costs. The authors present an asset management strategy in this report that can be used by state DOTs to (1) allocate capital dollars for the dual purpose of purchasing new buses and rebuilding existing buses within the constraints of a fixed budget, when the needs of all the constituent agencies in a peer group are considered, and (2) distribute funds among the agencies in an equitable manner. The proposed procedure includes two optimization models. Model 1 attempts to maximize the weighted fleet life of all the buses that are being purchased and rebuilt for a given peer group. Model 2 is designed to maximize the Remaining Life (RL) of the entire peer group comprising the existing buses as well as those being replaced or rebuilt. Three case studies are presented in the report to demonstrate the application of the models: two with medium sized buses and one with large sized buses. Besides replacement, three other program options are considered: two levels of rehabilitation, and one level of remanufacturing. Necessary budgetary and fleet data were provided by the Michigan Department of Transportation. The case studies show that the proposed method is viable, and can be used for the designated purpose with fleet data currently available with state DOTs. The case studies also identify major shortfalls in funding, and help to underscore the need of increased funding levels to improve the quality of the fleet.