Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10296577 | Transportation Research Part A: Policy and Practice | 2005 | 18 Pages |
Abstract
Recently, the motor carrier industry has experienced: (1) the sharp decline of vehicle (tractor) re-sale values, and (2) the substantial increase of vehicle insurance premiums. This study examines how motor carriers should adjust their vehicle replacement policies when dramatic changes of vehicle re-sale values and insurance premiums are observed. The study first develops a model of vehicle replacement optimization, and then solves the model by using the actual data obtained from a motor carrier. Intensive sensitivity analyses are performed to examine how the optimal solution is affected by the changes of vehicle re-sale values and insurance premiums, so that carriers can obtain normative policy implications. The results imply that: (1) carriers should use longer replacement cycles (extend the duration of vehicle use) when re-sale values decline, and (2) carriers' vehicle replacement policies should not be affected by the fluctuations of insurance premiums unless the fluctuations are substantial.
Related Topics
Physical Sciences and Engineering
Engineering
Civil and Structural Engineering
Authors
Yoshinori Suzuki, Gregory R. Pautsch,