Abstract
In this paper, an asset management methodology is presented to investigate the optimal repair policies of the public facilities under uncertainty of economic lives. The economic and physical deterioration of a facility are assumed to be subject to Markovian processes. The Markov decision model is formulated to find out the optimal policies for scrapping and repair of the facility by considering simultaneously economic values as well as life cycle costs for repair of the facility. The model presented in the paper is applied to the asset management of the port facilities.
