Evaluation of asset replacement strategies considering economic cycles: lessons from the machinery rental business
by Andreas Größler; Enzo Bivona; Fuzhuang Li
International Journal of Modelling in Operations Management (IJMOM), Vol. 5, No. 1, 2015

Abstract: In businesses with heavy capital investments, the effective management of assets is crucial, in particular in the fleet rental business where assets are the major source of revenues. One important question in this regard concerns the replacement of used assets and the purchase of new assets. Thus, the objective of this study is to evaluate performance effects of asset replacement strategies. In order to maximise net cash flow of a rental company for construction machinery, a range of scenarios investigating the timing and nature of policies for replacing the fleet are analysed. Simulation findings are then discussed to generalise results beyond the insights for the case study company.

Online publication date: Tue, 05-May-2015

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