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MONETARY PERFORMANCE APPLIED TO PAVEMENT OPTIMIZATION DECISION MANAGEMENT

Abstract

The traditional pavement management system approach optimizes treatment scheduling based on physical condition performance. The recent initiatives of the Public Sector Accounting Board (PSAB) are consistent with the concept of using monetary performance in the decision management process. The Municipal Infrastructure Management System (MIMS) optimization model was developed in the mid-1990s as a research and development initiative. Part of the unique functionality of this model is a detailed modeling approach, which improves modeling reliability and incorporates monetary performance in the optimization process. In this model, the optimal solution integrates the combined monetary impact of minimizing operations expenditures and maximizing the value of the asset. The result provides a dollar to dollar comparison of financial expenditures to monetary performance. This approach is consistent with new PSAB PS-3150 legislation for valuing tangible capital assets. This approach takes the current PS-3150 legislative requirements of accounting to the next level of sustainable asset management. This paper discusses the MIMS key decision management components including asset valuation as a monetary measure of performance. The application is applied to a pavement asset management case study within a Canadian urban municipality. The case study illustrates that appropriate increases in spending can improve the net financial bottom line. Note * – This paper is based on a paper entitled “Asset Valuation Decision Management Applied to Pavement Optimization” presented in June 2008 in Calgary, Alberta at the International Conference on Managing Pavement Assets (ICMPA).

Conference Paper Details

Session title:
QUANTIFYING SUSTAINABILITY IN PAVEMENT REHABILITATION PROJECTS
Author(s):
Gordon Molnar
Topics:
Pavements
Year:
2008