Pub Date : 2019-04-03DOI: 10.1080/0013791X.2018.1470272
Cristina Matos Silva, J. Serro, Patrícia Dinis Ferreira, Inês Teotónio
Abstract Green roofs and living walls are considered effective solutions for improving the environmental integrity of urbanized areas and the overall performance of buildings. Proposals are emerging not just for buildings but also for existing transport infrastructures that have needs/problems that can be met or addressed by such solutions. However, the economic feasibility of such sustainable solutions has not yet been clarified. This study presents a methodological approach to performing cost–benefit analyses of greening urban transport infrastructures at the separate financial, economic, and socioenvironmental levels. Infrastructure, user, and environmental dimensions are also assessed. Whole life cycle costs and socioenvironmental benefits are considered together. The methodology is applied to one of the main stations in Lisbon, Portugal: Entrecampos Railway Station. Five different case study alternatives for the station’s retrofit with green infrastructures are compared to its current situation. The cost–benefit analysis demonstrated that all five greening alternatives are economically feasible. For a 50-year life cycle and a 3.36% discount rate, the net present value ranged between EUR 734,700 and EUR 7,733,279. A sensitivity analysis was also performed, revealing a high degree of influence of discount and inflation rates, recreation, aesthetics improvement, well-being, and the station noise reduction on the net present value, ranging from 1.5 to 9%.
{"title":"The socioeconomic feasibility of greening rail stations: a case study in lisbon","authors":"Cristina Matos Silva, J. Serro, Patrícia Dinis Ferreira, Inês Teotónio","doi":"10.1080/0013791X.2018.1470272","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1470272","url":null,"abstract":"Abstract Green roofs and living walls are considered effective solutions for improving the environmental integrity of urbanized areas and the overall performance of buildings. Proposals are emerging not just for buildings but also for existing transport infrastructures that have needs/problems that can be met or addressed by such solutions. However, the economic feasibility of such sustainable solutions has not yet been clarified. This study presents a methodological approach to performing cost–benefit analyses of greening urban transport infrastructures at the separate financial, economic, and socioenvironmental levels. Infrastructure, user, and environmental dimensions are also assessed. Whole life cycle costs and socioenvironmental benefits are considered together. The methodology is applied to one of the main stations in Lisbon, Portugal: Entrecampos Railway Station. Five different case study alternatives for the station’s retrofit with green infrastructures are compared to its current situation. The cost–benefit analysis demonstrated that all five greening alternatives are economically feasible. For a 50-year life cycle and a 3.36% discount rate, the net present value ranged between EUR 734,700 and EUR 7,733,279. A sensitivity analysis was also performed, revealing a high degree of influence of discount and inflation rates, recreation, aesthetics improvement, well-being, and the station noise reduction on the net present value, ranging from 1.5 to 9%.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"167 - 190"},"PeriodicalIF":1.2,"publicationDate":"2019-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1470272","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48450051","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-03-18DOI: 10.1080/0013791X.2019.1580808
Mackenzie G. Whitman, H. Baroud, K. Barker
Abstract Managing risks to critical infrastructure systems requires decision makers to account for impacts of disruptions that render these systems inoperable. This article evaluates dock-specific resource allocation strategies to improve port preparedness by integrating a dynamic risk-based interdependency model with weighted multicriteria decision analysis techniques. A weighted decision analysis technique allows for decision makers to balance widespread impacts due to cascading inoperability with certain industries that are important to the local economy. Further analysis of the relationship between inoperability and expected economic losses is explored per commodity flowing through the port, which allows an understanding of cascading impacts through interdependent industries. Uncertainty is accounted for through the use of probability distributions of total expected loss per industry that encompass the uncertainty of the length of disruption and severity of the impact that is mitigated by alternative strategies. A set of discrete allocations options of preparedness plans is analyzed in a study of the Port of Catoosa in Oklahoma along the Mississippi River Navigation System. The economic loss analysis showed that the integration of multicriteria decision analysis helps in prioritizing strategies according to several criteria such as gross domestic product (GDP) and decision maker risk aversion that are not typically addressed when strategies are prioritized according to the average interdependent economic losses alone.
{"title":"Multicriteria risk analysis of commodity-specific dock investments at an inland waterway port","authors":"Mackenzie G. Whitman, H. Baroud, K. Barker","doi":"10.1080/0013791X.2019.1580808","DOIUrl":"https://doi.org/10.1080/0013791X.2019.1580808","url":null,"abstract":"Abstract Managing risks to critical infrastructure systems requires decision makers to account for impacts of disruptions that render these systems inoperable. This article evaluates dock-specific resource allocation strategies to improve port preparedness by integrating a dynamic risk-based interdependency model with weighted multicriteria decision analysis techniques. A weighted decision analysis technique allows for decision makers to balance widespread impacts due to cascading inoperability with certain industries that are important to the local economy. Further analysis of the relationship between inoperability and expected economic losses is explored per commodity flowing through the port, which allows an understanding of cascading impacts through interdependent industries. Uncertainty is accounted for through the use of probability distributions of total expected loss per industry that encompass the uncertainty of the length of disruption and severity of the impact that is mitigated by alternative strategies. A set of discrete allocations options of preparedness plans is analyzed in a study of the Port of Catoosa in Oklahoma along the Mississippi River Navigation System. The economic loss analysis showed that the integration of multicriteria decision analysis helps in prioritizing strategies according to several criteria such as gross domestic product (GDP) and decision maker risk aversion that are not typically addressed when strategies are prioritized according to the average interdependent economic losses alone.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"346 - 367"},"PeriodicalIF":1.2,"publicationDate":"2019-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2019.1580808","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41625537","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-02-17DOI: 10.1080/0013791X.2018.1512692
Luis V. Montiel, J. Bickel
Abstract We test the accuracy of various methods for approximating underspecified joint probability distributions. In particular, we examine the maximum entropy and the analytic center approximations, and we introduce three methods for approximating a discrete joint probability distribution given partial probabilistic information. Our results suggest that recently proposed approximations and our new approximations more accurately represent the possible uncertainty models than do previous models such as maximum entropy.
{"title":"Exploring the Accuracy of Joint-Distribution Approximations Given Partial Information","authors":"Luis V. Montiel, J. Bickel","doi":"10.1080/0013791X.2018.1512692","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1512692","url":null,"abstract":"Abstract We test the accuracy of various methods for approximating underspecified joint probability distributions. In particular, we examine the maximum entropy and the analytic center approximations, and we introduce three methods for approximating a discrete joint probability distribution given partial probabilistic information. Our results suggest that recently proposed approximations and our new approximations more accurately represent the possible uncertainty models than do previous models such as maximum entropy.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"323 - 345"},"PeriodicalIF":1.2,"publicationDate":"2019-02-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1512692","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44125168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-02-03DOI: 10.1080/0013791X.2018.1555299
Nithin Saravana Marthandam, Ean H. Ng, Javier Calvo-Amodio, Chinmay Narwankar, L. A. Barroso
Abstract Studies on project failure and its subsequent termination phase are scarce; studies that use a quantitative approach are almost nonexistent. This is most likely because organizations usually do not collect data on project failures, are unable to share such data, or a combination of both. The contribution of this article is twofold: to (1) showcase a methodology to validate a model using actual business cases and (2) validate a project termination phase forecast model (PTPFM) using the methodology. The model is validated through four business cases, comparing the results from the model to the decisions made in reality.
{"title":"Validating a model for forecasting the project termination phase using existing business cases","authors":"Nithin Saravana Marthandam, Ean H. Ng, Javier Calvo-Amodio, Chinmay Narwankar, L. A. Barroso","doi":"10.1080/0013791X.2018.1555299","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1555299","url":null,"abstract":"Abstract Studies on project failure and its subsequent termination phase are scarce; studies that use a quantitative approach are almost nonexistent. This is most likely because organizations usually do not collect data on project failures, are unable to share such data, or a combination of both. The contribution of this article is twofold: to (1) showcase a methodology to validate a model using actual business cases and (2) validate a project termination phase forecast model (PTPFM) using the methodology. The model is validated through four business cases, comparing the results from the model to the decisions made in reality.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"142 - 166"},"PeriodicalIF":1.2,"publicationDate":"2019-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1555299","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44382308","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-28DOI: 10.1080/0013791X.2018.1559384
C. Fernandes, Carlos Oliveira Cruz, Filipe Moura
Abstract Renegotiations are often claimed to be the major pitfall in public–private partnership projects. In fact, the literature and empirical evidence suggest a bias toward favoring concessionaires, although there are well-known examples of harmful unilateral decisions by governments. This article establishes a distinction between structural renegotiations (with changes in the risk-sharing agreement) and nonstructural renegotiations (without shifting risk) and analyzes the implications of structural renegotiations in a road concession by comparing the ex ante and ex post financial implications for government, concessionaire, and users. The selected project is one that started as a shadow toll and was later changed to real toll. The analysis shows that the renegotiation essentially transferred costs to the users. The financial burden for the government decreased and the internal rate of return (IRR) of the concessionaire increased slightly although the overall risk profile of the concession decreased. The users supported a 40% higher cost, and the system gained an additional cost component (the electronic tolling system). Overall the global financial costs increased 40% when compared with the initial regime. The article also sets out some discussions and implications for policymakers.
{"title":"Ex post evaluation of PPP government-led renegotiations: Impacts on the financing of road infrastructure","authors":"C. Fernandes, Carlos Oliveira Cruz, Filipe Moura","doi":"10.1080/0013791X.2018.1559384","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1559384","url":null,"abstract":"Abstract Renegotiations are often claimed to be the major pitfall in public–private partnership projects. In fact, the literature and empirical evidence suggest a bias toward favoring concessionaires, although there are well-known examples of harmful unilateral decisions by governments. This article establishes a distinction between structural renegotiations (with changes in the risk-sharing agreement) and nonstructural renegotiations (without shifting risk) and analyzes the implications of structural renegotiations in a road concession by comparing the ex ante and ex post financial implications for government, concessionaire, and users. The selected project is one that started as a shadow toll and was later changed to real toll. The analysis shows that the renegotiation essentially transferred costs to the users. The financial burden for the government decreased and the internal rate of return (IRR) of the concessionaire increased slightly although the overall risk profile of the concession decreased. The users supported a 40% higher cost, and the system gained an additional cost component (the electronic tolling system). Overall the global financial costs increased 40% when compared with the initial regime. The article also sets out some discussions and implications for policymakers.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"116 - 141"},"PeriodicalIF":1.2,"publicationDate":"2019-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1559384","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45113063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-02DOI: 10.1080/0013791X.2018.1532543
T. Eschenbach, N. Lewis
Abstract In choosing when to start collecting Social Security, the differences in expected net present values (NPVs) are small—but the corresponding standard deviations are not. Starting earlier is less risky. The case analyzed is single individuals in the U.S. system, but the methodology can be applied to couples and to the systems of other nations. Considering risk and return together places Social Security in the same risk/return framework as other capital investments. Behavioral, situational, and qualitative factors that often dominate decisions on when to start are linked with quantitative approaches to longevity risk and mortality risk.
{"title":"Risk, standard deviation, and expected value: when should an individual start social security?","authors":"T. Eschenbach, N. Lewis","doi":"10.1080/0013791X.2018.1532543","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1532543","url":null,"abstract":"Abstract In choosing when to start collecting Social Security, the differences in expected net present values (NPVs) are small—but the corresponding standard deviations are not. Starting earlier is less risky. The case analyzed is single individuals in the U.S. system, but the methodology can be applied to couples and to the systems of other nations. Considering risk and return together places Social Security in the same risk/return framework as other capital investments. Behavioral, situational, and qualitative factors that often dominate decisions on when to start are linked with quantitative approaches to longevity risk and mortality risk.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"24 - 39"},"PeriodicalIF":1.2,"publicationDate":"2019-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1532543","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44086519","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-02DOI: 10.1080/0013791X.2018.1498961
Hemantha S. B. Herath
Abstract Often in Bayesian anlysis closed-form posteriors cannot be derived for complex models. However, it is important to be able to do Bayesian analysis relatively easily. This article presents an alternative, the more general Markov chain Monte Carlo (MCMC) simulation approach, which permits the efficient development of posterior distributions. MCMC simulation methods are now becoming the state of the art in numerous empirical and analytical applications in applied mathematics, biostatistics, marketing, economics, and other areas, but those methods are noticeably absent in the engineering economic analysis literature. The purpose of this article is to introduce MCMC simulation methods to the engineering economics research and practitioner community. Using postaudits and cost estimation as application areas, the article focuses on what MCMC simulation entails, its advantages, and its disadvantages and highlights the usefulness and versatility of the approach.
{"title":"Postauditing and Cost Estimation Applications: An Illustration of MCMC Simulation for Bayesian Regression Analysis","authors":"Hemantha S. B. Herath","doi":"10.1080/0013791X.2018.1498961","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1498961","url":null,"abstract":"Abstract Often in Bayesian anlysis closed-form posteriors cannot be derived for complex models. However, it is important to be able to do Bayesian analysis relatively easily. This article presents an alternative, the more general Markov chain Monte Carlo (MCMC) simulation approach, which permits the efficient development of posterior distributions. MCMC simulation methods are now becoming the state of the art in numerous empirical and analytical applications in applied mathematics, biostatistics, marketing, economics, and other areas, but those methods are noticeably absent in the engineering economic analysis literature. The purpose of this article is to introduce MCMC simulation methods to the engineering economics research and practitioner community. Using postaudits and cost estimation as application areas, the article focuses on what MCMC simulation entails, its advantages, and its disadvantages and highlights the usefulness and versatility of the approach.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"40 - 67"},"PeriodicalIF":1.2,"publicationDate":"2019-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1498961","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49661293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-02DOI: 10.1080/0013791X.2018.1508618
F. Lefley
Abstract The main research objectives are to ascertain the state of the art of the postauditing practices of UK small/medium enterprises (SMEs) to fill a gap in the literature and to offer a sound empirical base for future discussion. We show that the reality of those that undertake postaudits differs from the perceptions of those that do not and may therefore present a learning opportunity. The level of importance of the three key objectives (control, learning, and evaluation) of a postaudit appears to be influenced by organizational structure. The reasons for not undertaking a postaudit and difficulties encountered are clearly evidenced.
{"title":"Research into the postaudit of capital projects in UK SME organizations","authors":"F. Lefley","doi":"10.1080/0013791X.2018.1508618","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1508618","url":null,"abstract":"Abstract The main research objectives are to ascertain the state of the art of the postauditing practices of UK small/medium enterprises (SMEs) to fill a gap in the literature and to offer a sound empirical base for future discussion. We show that the reality of those that undertake postaudits differs from the perceptions of those that do not and may therefore present a learning opportunity. The level of importance of the three key objectives (control, learning, and evaluation) of a postaudit appears to be influenced by organizational structure. The reasons for not undertaking a postaudit and difficulties encountered are clearly evidenced.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"68 - 95"},"PeriodicalIF":1.2,"publicationDate":"2019-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1508618","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47316672","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-12-29DOI: 10.1080/0013791X.2018.1528408
Taner Cokyasar, A. Garcia-Diaz, Mingzhou Jin
Abstract Salary administration research mostly examines the compensation guides in a subjective manner and lacks quantitative approaches. Recent failure instances of salary administration demonstrate the exiguity and/or inapplicability of scientific research in this area. This research considers the core aspects of theoretical salary administration while complying with the recent competitive working environment. In this article, a mathematical optimization approach that recognizes the significance of performance and potential to future promotions of employees is proposed to find the optimal salary increase amounts and to set an advantageous schedule for salary increases. The two objectives are combined with a weight, and a sensitivity analysis shows the impact of the weight on both objectives to provide managerial guidance. The resulting raise amounts satisfy both internal alignment and external competitiveness conditions and represent employee performance and potential for promotion. The proposed mixed integer programming problem can be solved with commercial solvers quickly, even for rather large instances. The short computational time directly addresses the challenge raised by the current trend that more enterprises hire a large number of exempt employees. Additionally, two cases are presented with detailed data collection to illustrate the applications and limitations of the proposed model.
{"title":"Optimization of size and timing of base salary increases","authors":"Taner Cokyasar, A. Garcia-Diaz, Mingzhou Jin","doi":"10.1080/0013791X.2018.1528408","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1528408","url":null,"abstract":"Abstract Salary administration research mostly examines the compensation guides in a subjective manner and lacks quantitative approaches. Recent failure instances of salary administration demonstrate the exiguity and/or inapplicability of scientific research in this area. This research considers the core aspects of theoretical salary administration while complying with the recent competitive working environment. In this article, a mathematical optimization approach that recognizes the significance of performance and potential to future promotions of employees is proposed to find the optimal salary increase amounts and to set an advantageous schedule for salary increases. The two objectives are combined with a weight, and a sensitivity analysis shows the impact of the weight on both objectives to provide managerial guidance. The resulting raise amounts satisfy both internal alignment and external competitiveness conditions and represent employee performance and potential for promotion. The proposed mixed integer programming problem can be solved with commercial solvers quickly, even for rather large instances. The short computational time directly addresses the challenge raised by the current trend that more enterprises hire a large number of exempt employees. Additionally, two cases are presented with detailed data collection to illustrate the applications and limitations of the proposed model.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"115 - 97"},"PeriodicalIF":1.2,"publicationDate":"2018-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1528408","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47592056","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-12-02DOI: 10.1080/0013791X.2018.1535012
Javad Seif, B. Shields, A. J. Yu
Abstract Construction projects usually get delayed for several time periods. When the planning horizon of a project is extended, projections for purchase and salvage of machinery within the planning horizon become inaccurate and less beneficial and often lead to unexpected costs. In this article, we formulate a parallel machine replacement (PMR) problem as a two-stage stochastic program with an uncertain planning horizon. We consider renting as an alternative to purchasing and maintaining the machinery. We show the application of the model through a case study in construction projects. Through numerical analysis, we derive managerial implications and show the value of the stochastic model.
{"title":"Parallel machine replacement under horizon uncertainty","authors":"Javad Seif, B. Shields, A. J. Yu","doi":"10.1080/0013791X.2018.1535012","DOIUrl":"https://doi.org/10.1080/0013791X.2018.1535012","url":null,"abstract":"Abstract Construction projects usually get delayed for several time periods. When the planning horizon of a project is extended, projections for purchase and salvage of machinery within the planning horizon become inaccurate and less beneficial and often lead to unexpected costs. In this article, we formulate a parallel machine replacement (PMR) problem as a two-stage stochastic program with an uncertain planning horizon. We consider renting as an alternative to purchasing and maintaining the machinery. We show the application of the model through a case study in construction projects. Through numerical analysis, we derive managerial implications and show the value of the stochastic model.","PeriodicalId":49210,"journal":{"name":"Engineering Economist","volume":"64 1","pages":"1 - 23"},"PeriodicalIF":1.2,"publicationDate":"2018-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/0013791X.2018.1535012","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43924096","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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