An optimization model for bus fleet replacement with budgetary and environmental constraints

ABSTRACT

As maintenance and operation costs increase with usage over time, equipment is replaced when the value of new equipment is more attractive. Some methods have been developed to solve this problem. In the public transport sector, such problems are frequently analyzed by fleet managers and determined by bus age restriction regulations. We propose an Integer Programming model that integrates both budgetary and environmental constraints (CO₂ emissions) which, as far as we know, have not previously been studied in conjunction. The study aims to determine the optimal replacement plan for a fleet of diesel buses of different size, age, maintenance costs and emissions rates, with new (less polluting) diesel buses over a time horizon of 50 years. The results indicate that it is possible to reduce emissions with a low annual budget using an optimal replacement policy.