Middle and West Delta Mills Company (MWDMC) was first established as a public sector company in 1967. In 1991, it became a public enterprise company according to Law number 159/1991. The activities of the company comprise wheat milling and distribution, bread and pasta making, and wheat storage. These activities involve moving a substantial amount of raw materials and products, which is carried out by road transport. The company has its own fleet of heavy goods vehicles that serves transport activities in the company.
This research paper aims at identifying the optimum level of use for replacement of heavy goods vehicles of Middle and West Delta Mills Company (MWDMC). In addition, the paper aims to identify and develop models that express the behavior of vehicle maintenance cost with vehicle age.
First, the paper identifies vehicle replacement policy determination and reviews replacement criteria of heavy goods vehicles. Then the Total Cost Technique (TCT) is used to identity the optimum level of use for replacement for a selected sample representing the MWDMC fleet.
Maintenance cost is considered to be the vital cost component that affects the life of vehicles. So, maintenance cost data collected for the selected sample of vehicles is used to develop statistical relationships that express the behavior of maintenance cost as a function of vehicle age. This is carried out for different vehicle types using regression analysis.
The analysis showed that the ideal level of vehicle age ranges between 7 and 9 years according to the vehicle type. In addition, the relationship between vehicle maintenance cost and vehicle age was found to be reasonably expressed by the exponential equation.