Issues in Optimal Asset Management

Abstract

In previous presentations the authors have discussed optimal asset management within the water industry. This paper extends this work by developing a case study around optimal asset management. Whilst earlier work has been focused on the development of theoretical models, this paper focusses on issues in application of the optimal asset model. It presents the steps to address the application of the model. It does this by addressing a specific piece of equipment within the water industry subject to replacement and refurbishment. Hence it describes a practical solution for dealing with the trade-off between capital expenditure (CAPEX, replacements of an asset) and operational expenditure (OPEX, refurbishment of an asset). The case study is based on experiences with two Water Companies.