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

Project Report Now Available
Project Report

Primary Investigator
Dr. Snehamay Khasnabis
Professor of Civil and Environmental Engineering
Wayne State University
Detroit, MI 48202
(313) 577 3915

Project Objective
The purpose of this study is to develop a procedure that can be used by the state DOTs to optimally allocate limited capital dollars for the dual purpose of purchasing new buses and for rebuilding existing buses to be used by local transit agencies. The project will develop methodology for optimizing the investment in new buses versus various rehabilitation strategies under budget limitations. The optimization methodology will allow State DOTs to identify a solution that meets minimum fleet size requirements within budgetary constraints. The result of this project will be an allocation procedure that can be incorporated into asset management practices.

Project Abstract
Most state DOTs receive requests for capital funds from local transit agencies for replacing existing buses that far exceed the funds available. Due to the lack of necessary capital dollars, the DOTs are not able to grant all such requests under the current allocation procedures even though the state’s responsibility is to provide match funding up to 20% of the cost of a new bus. Thus, many transit agencies are faced with the task of providing service without adequate fleet size of appropriate quality.

State DOTs are faced with determining the best combination of resource allocation to meet the replacement needs of transit agencies to maintain minimum fleet sizes. With a fraction of the procurement cost for a new bus, it may be possible to extend the life of an existing bus, thereby partly solving the question of inadequate fleet size. Since the Federal Transit Administration considers rehabilitation costs allowable expenses, the fraction of the cost borne by the state will be small. Thus, it may be possible for the state DOT to allocate funds partly for the purchase of new buses, and partly for rehabilitation of existing buses, and thus meet the requests for all buses although not all will be new.

A procedure is not currently available that can be used to allocate a fixed number of dollars to meet the needs for a given fleet size by a combination of new and rebuilt buses. The project will collect information on the costs and conditions of each alternative strategy (replacement and rehabilitation) and develop optimization criteria that will allow needs to be met using the lower cost options. Several optimization models will be developed and applied to a case study analysis. From this analysis, the most desirable optimization model will be selected.

Task Descriptions

  1. Task 1: Identify various constraints faced by DOTs in allocating resources for the purchase of new buses and rebuilding existing buses.
  2. Task 2: Develop alternative methodologies for allocating fixed resources over a planning horizon for both buying new buses and rebuilding existing buses.
  3. Task 3: Validate alternative procedures against the experience of case studies.
  4. Task 4: Identify the most appropriate procedure for allocating resources considering data availability, ease of application, etc.

Relationship to Other Research Projects

Technology Transfer Activities
A final report to be posted on the MRUTC web site will illustrate the optimization model.

Potential Benefits of the Project
This is a real issue on which some practitioners need help. The optimization model resulting from this project will help state DOTs to better allocate limited resources for bus replacement and rehabilitation to maintain minimum fleet sizes.

Project Information

  • Milestones, Dates: Project start date: 9/1/01, Final report by 8/31/02
  • Yearly Budget: $98,285
  • Total Budget: $98,285
  • Student Involvement: One graduate research assistant, 9 months @ 50% effort and one student hourly employee
  • TRB Keywords: Asset Management, Maintenance Management, Strategic Planning, Transit
  • Primary Subject: Optimal Resource Allocation
  • Modal Orientation: Transit
  • Project Number: 02-01