ECONOMICS OF TRANSIT BUS REPLACEMENT

ALTHOUGH NORMAL DEPRECIATION METHODS MAY UTILIZE A 10 OR 12-YEAR LIFE, ACTUAL OPERATING LIVES OF 15 YEARS OR MORE ARE NOT UNCOMMON FOR TRANSIT BUSES. A NUMBER OF USEFUL ANALYTICAL TECHNIQUES ARE AVAILABLE FOR MAKING MORE PROFITABLE EQUIPMENT REPLACEMENT DECISIONS. ONE FINDING IS USING DISCOUNTED CASH FLOW THEORY TO DETERMINE OPTIMUM VEHICLE REPLACEMENT CYCLES. IT TAKES INTO CONSIDERATION THE TIME VALUE OF MONEY AND PROVIDES MEANS FOR ALLOCATING LIMITED CAPITAL FUNDS TO THOSE INVESTMENTS PROVIDING THE HIGHEST RETURN. AMONG THE KEY ELEMENTS OF A SOUND REPLACEMENT STRATEGY ARE UNDERSTANDING OF, AND DIFFERENTIATION BETWEEN, THE SERVICE LIFE, THE TECHNOLOGICAL LIFE, AND THE ECONOMIC LIFE OF TRANSIT EQUIPMENT. /AUTHOR/

  • Supplemental Notes:
    • Vol67, No 6, PP 21-26
  • Publication Date: 1971-11

Media Info

Subject/Index Terms

  • TRT Terms: Buses; Costs
  • Uncontrolled Terms: Replacement costs
  • Subject Areas: Economics; Finance; Highways; Public Transportation; Society;

Filing Info

  • Accession Number: 00202027
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 24 1972 12:00AM