Proceedings of the 1st International Conference on Applied Mathematics in Engineering and Reliability
Radim Bris and Phan Dao
Due to market flexibility, repair and replacement costs in reality are normally uncertain and can be specified by an interval capturing the most preferable value. Such a specification of uncertain costs naturally calls for the use of fuzzy sets. In this paper, we therefore propose using fuzzy numbers to characterize repair and replacement costs. The impact of fuzzy costs on the optimal decision is then investigated in the context of an industrial problem—optimizing water pipe renovation strategies. Here we examine the risk of violating budget constraint on the annual costs associated with pipe-break repair events. This is performed by evaluating the mean chance of random fuzzy events that represent random fuzzy costs exceeding a given budget. The benefit of using fuzzy numbers is then validated through various numerical examples.