Stasko, Timon. 2011. Parallel Real Asset Management With Environmental Regulation: Integer
Programming And Approximate Dynamic Programming Approaches. Doctoral
Dissertation, Cornell University.
This dissertation presents a
pair of models designed to assist in the management of multiple deteriorating
real assets, given financial and environmental concerns. Whether the assets are
buildings or vehicles or machines, their purchase and upkeep can be costly,
making optimal management policies valuable. The models presented build upon a
strong literature. They incorporate numerous factors which have been modeled
previously, though generally not together. These include technological change,
linked decisions for multiple assets, and non-steady-state demand. They stand
out from previous literature due to their ability to model retrofits, as well
as repairs and replacements. These retrofits can have initial as well as
ongoing costs, and can impact externalities, making them relatively general.
The integer program model is fast and well suited to analysis requiring large numbers
of runs, such as the comparison of a wide range of regulatory alternatives. The
approximate dynamic program, while slower, is able to handle stochastic asset
failures and repair costs for large asset portfolios, something which previous
models have struggled to accomplish without strong simplifying assumptions. A
customized value iteration approach produces good solutions within a few hours
for sample problems involving a fleet of well over a thousand vehicles subject
to clean diesel regulation.
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