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Uncertainty of Net Present Value calculations and the impact on applying integrated maintenance approaches to the UK rail industry

  • Paul Baguley
    ,
  • Leigh Kirkwood
    ,
  • Essam Shehab
    ,
  • Andrew Starr
Research Output: Contribution to journal Article Peer-review

Open access

Abstract

The Public performance indicator (PPI) is an important Key Performance Indicator for Network Rail and monitored carefully by the organisation and their external stakeholders. Condition monitoring is of increasing interest within network rail as a suitable method for increasing asset reliability and improving the PPI metric. As condition monitoring methods are identified each will need assessment to establish the cost and benefit. Benefit can be measured in cost savings as poor PPI performance results in fines. Within many industries Net Present Value (NPV) calculations are used to determine how quickly investments will break-even. Cost-risk is a term that is used to describe the financial impact of an unexpected event (a risk). This paper outlines a more detailed approach to calculating NPV which considers the cost-risk effect of changes of the denial of service charging rate. NPV prediction is of importance when assessing when to deploy different fault detection strategies to maintenance issues, and therefore the cost-risk of the NPV calculation should be used to support asset management decisions.

Publication Information

Output type

Research Output: Contribution to journal Article Peer-review

Original language

English

Pages from-to (Number of pages)

Pages 245-249

Journal (Volume, Issue Number)

Procedia CIRP (Volume 38)

Publication milestones

  • Accepted/In press - 28/07/2015
  • Published - 27/10/2015

Publication status

Published - 27/10/2015

ISSN

2212-8271

External Publication IDs

  • handle.net: 10547/623962
  • Scopus: 84964058521

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