Flexible lease contracts in the fleet replacement problem with alternative fuel vehicles: a real-options approach.

Ansaripoor, Amir H.; Oliveira, Fernando S.

Abstract

We study the use of flexible lease contacts in the fleet portfolio management problem of a firm that aims to minimize its cost and risk (Recursive Expected Conditional Value at Risk), simultaneously, in a stochastic multi-period setting by deciding which technologies to use in its fleet. We propose a model using real options (return and swap) to model contract flexibility and to account for different uncertainties (CO2 prices, fuel prices, mileage covered by a vehicle, fuel consumption, and technological). We analyse how fuel price uncertainty and technological progress influence the value of the options. We validate the results using a real-world case study conducted in the UK.

Citation

ANSARIPOOR, A.H. and OLIVEIRA, F.S. 2018. Flexible lease contracts in the fleet replacement problem with alternative fuel vehicles: a real-options approach. European journal of operational research [online], 266(1), pages 316-327. Available from: https://doi.org/10.1016/j.ejor.2017.09.010

• Journal Article Type: Article
• Acceptance Date: Sep 8, 2017
• Online Publication Date: Sep 25, 2017
• Publication Date: Apr 1, 2018
• Deposit Date: Oct 21, 2023
• Publicly Available Date: Nov 15, 2023
• Journal: European journal of operational research
• Print ISSN: 0377-2217
• Electronic ISSN: 1872-6860
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 266
• Issue: 1
• Pages: 316-327
• DOI: https://doi.org/10.1016/j.ejor.2017.09.010
• Keywords: Information Systems and Management; Management Science and Operations Research; Modeling and Simulation; General Computer Science; Industrial and Manufacturing Engineering
• Public URL: https://rgu-repository.worktribe.com/output/2079481