Strategic vehicle fleet management–a joint solution of make-or-buy, composition and replacement problems

PurposeThe purpose of this paper is to develop an original model and a solution procedure for solving jointly three main strategic fleet management problems (fleet composition, replacement and make-or-buy), taking into account interdependencies between them.Design/methodology/approachThe three main strategic fleet management problems were analyzed in detail to identify interdependencies between them, mathematically modeled in terms of integer nonlinear programing (INLP) and solved using evolutionary based method of a solver compatible with a spreadsheet.FindingsThere are no optimization methods combining the analyzed problems, but it is possible to mathematically model them jointly and solve together using a solver compatible with a spreadsheet obtaining a solution/fleet management strategy answering the questions: Keep currently exploited vehicles in a fleet or remove them? If keep, how often to replace them? If remove then when? How many perspective/new vehicles, of what types, brand new or used ones and when should be put into a fleet? The relatively large scale instance of problem (50 vehicles) was solved based on a real-life data. The obtained results occurred to be better/cheaper by 10% than the two reference solutions – random and do-nothing ones.Originality/valueThe methodology of developing optimal fleet management strategy by solving jointly three main strategic fleet management problems is proposed allowing for the reduction of the fleet exploitation costs by adjusting fleet size, types of exploited vehicles and their exploitation periods.