OPTIMISATION OF INVESTMENTS IN ASSET MANAGEMENT OF WATER SUPPLY SYSTEMS USING THE INFRASTRUCTURE VALUE INDEX
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Abstract
The field of asset management provides a coordinated effort to extract value from physical assets, incorporating an integrated approach to deal with risks, costs and performance. This paper proposes an oriented approach to selecting infrastructure investment projects in an asset management framework. The standard metric used for project selection with multiple assets is the Infrastructure Value Index (IVI), which has been used to characterize water sector assets in several countries. Two mixed-integer linear programming models are developed in this paper. The first optimization model deals with a capital budget allocation problem that intends to select investment projects that maximize assets’ condition. The second optimization model deals with a budget planning problem aiming at minimizing the capital required to maintain the assets in the desired condition. The application of the models is illustrated by a case study of a company operating in the water sector in Portugal, namely in a pumping station from a water supply system. The results obtained in the different scenarios analysed are discussed with a view to supporting the design of more efficient asset management policies.
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