|Title:||Optimum lifecycle management of asset portfolios with non-monetary value realization|
|Authors :||Heitz, Christoph|
|Proceedings:||Nineteenth International Working Seminar on Production Economics, Pre-prints, Volume 2: Papers scheduled for Tuesday, February 24, 2016, 8.00 am to 21.15 pm|
|Conference details:||19th International Working Seminar on Production Economics, Innsbruck, Austria, 22-26 February 2016|
|Editors of the parent work:||Grubbström, Robert W.|
Hinterhuber, Hans H.
|License (according to publishing contract) :||Licence according to publishing contract|
|Type of review:||Peer review (publication)|
|Subjects :||Asset management; ISO 55000|
|Subject (DDC) :||658.5: Production management|
|Abstract:||The economics of production systems depends on how expenses in terms of lifecycle costs for machines are balanced by revenues. Most classical models for optimizing lifecycle decisions are based on a profit maximization paradigm. However, the solutions are strongly dependent on how the technical performance of the machine is translated into monetary units. This is a critical issue because often it is not easy to monetarize non-ideal behavior of machines (e.g. How to monetarize the image damage of the company resulting from a major production outage?). In the present paper, we present a new perspective on the economics of production systems which is not based on a monetary (profit maximization) paradigm. Instead, we model a production system as an object that (a) needs investment, and (b) generates a value for the company, but this value can be expressed in arbitrary units. This is consistent with the approach of the new ISO standard 55’000. In such a framework, it is no more possible to base decision making on maximization of a single objective such as profit, as costs and value are measured in different units and cannot be added. However, many lifecycle decision problems can still be solved. In particular, we discuss typical lifecycle problems such as determining optimal lifetime or optimum maintenance levels. We show that, given a portfolio of machines, the optimum decisions for the single machines can be determined, with exception of a single global parameter that holds for the portfolio as a whole. For our approach, we combine approaches from economic utility theory and multidimensional optimization with lifecycle models of technical assets.|
|Departement:||School of Engineering|
|Organisational Unit:||Institute of Data Analysis and Process Design (IDP)|
|Publication type:||Conference paper|
|Other identifiers :||urn:nbn:se:liu:diva-128217|
|Published as part of the ZHAW project :||Optimiertes Asset Management von Infrastrukturnetzen|
|Appears in Collections:||Publikationen School of Engineering|
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