Modelling investment plans at asset portfolio level using optimum plan rationalisation approaches

A new approach to modelling asset portfolio capital investment and operational plans using a rationalisation process of multiple asset life cycle cost model's is presented. It overcomes the traditional limitations of stocastic models which do not explicitly consider deliverability issues such as scrarce resources, access in combination with an organisations objectives and finamcial imapcts. The approach builds on earlier work including the Strategic Asset Lifecycle Value Optimisation (SALVO) research and development project and rational decision making. It uses individual life cycle cost models for each asset class and programme-level constraints and multi-criteria to create an optimal plan with transparent cost/benefit/risk justification. Alternative scenarios can then be developed from this idealised plan using significance cooling and hill climbing algorithms. These explore the real-world constraints and competing objectives that might prevent such a plan from being delivered. In this way, a realistic and deliverable plan is produced, with fully quantified business impact of any constraints or programme changes that are required. Using the idealised plan as a benchmark, the rationalised variants and scenarios may be compared and a budget and resource-committed programme then selected. The approach is found to be equally applicable for capital investment, operations and maintenance activities, including the combined operational expenditures (OpEx) and capital (CapEx) plans at enterprise portfolio level. Further, its application is applicable for any industry and regulated or non-regulated asset managing organisations. Copyright (C) 2020 The Authors.