Engineering Economic Valuation of Ready-Made Design for Transportation Vehicles

dc.contributor.author Jackman, John
dc.contributor.author Zhao, Zhuoyi
dc.contributor.author Jackman, John
dc.contributor.author Min, K. Jo
dc.contributor.author Min, Kyung
dc.contributor.department Industrial and Manufacturing Systems Engineering
dc.date 2020-02-03T18:44:33.000
dc.date.accessioned 2020-06-30T04:46:47Z
dc.date.available 2020-06-30T04:46:47Z
dc.date.copyright Tue Jan 01 00:00:00 UTC 2019
dc.date.issued 2019-01-01
dc.description.abstract <p>Nowadays, transportation vehicles are upfront equipped with fuel saving devices such as winglets in airplanes so as to reduce fuel consumption. By ready-made design, we mean this approaching of equipping upfront on transportation vehicles. In this article, under the reasonable assumption that the fuel cost is volatile and follows a geometric Brownian motion (GBM) process, we use the theory of stochastic optimal control (1) to determine the threshold of fuel cost to decommission such a transportation vehicle, and (2) to determine the engineering economic valuation of such a design. For the threshold and the valuation, we proceed to obtain the analytical solutions to our approach, followed by sensitivity analyses as well as the derivation of the total expected operation lifetime until decommissioning. Finally, for the managerial insights and economic implications, we present an extensive numerical example with numerous empirical data sets from publicly available sources. For instance, as the fuel cost becomes more uncertain, economically rational decision makers will defer the decommissioning of a vehicle.</p>
dc.description.comments <p>This proceeding is published as Zhao, Zhuoyi, John Jackman, and K. Jo Min. "Engineering Economic Valuation of Ready-Made Design for Transportation Vehicles." In: <em>Proceedings of NY2019 New York Conferences</em>. Gul Dagci and Kaan Diyarbakirlioglu, editors. Regional Development Studies Institute Inc., New York, 2019. Pages 23-32. ISBN: 978-0-578-61810-4.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/imse_conf/196/
dc.identifier.articleid 1199
dc.identifier.contextkey 16324243
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath imse_conf/196
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/44273
dc.language.iso en
dc.source.bitstream archive/lib.dr.iastate.edu/imse_conf/196/0-2020_JackmanJohn_NYConferences_PermGrant.pdf|||Fri Jan 14 21:58:17 UTC 2022
dc.source.bitstream archive/lib.dr.iastate.edu/imse_conf/196/2019_JackmanJohn_EngineeringEconomic.pdf|||Fri Jan 14 21:58:18 UTC 2022
dc.subject.disciplines Operational Research
dc.subject.disciplines Transportation Engineering
dc.subject.keywords Ready-Made Design
dc.subject.keywords Fuel Saving Devices
dc.subject.keywords Volatile Fuel Cost
dc.subject.keywords Engineering Valuation
dc.subject.keywords Transportation Vehicles
dc.title Engineering Economic Valuation of Ready-Made Design for Transportation Vehicles
dc.type article
dc.type.genre conference
dspace.entity.type Publication
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relation.isOrgUnitOfPublication 51d8b1a0-5b93-4ee8-990a-a0e04d3501b1
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