Understanding short- and long-term implications of "myopic" fleet maintenance policies: a system dynamics application to a city bus company

Financial losses recorded in city bus companies often force managers to implement restructuring strategies aimed at improving business results. However, such decisions may not produce the expected consequences for a number of reasons. Both the internal and external environment in which such companies operate can make the design and implementation of long-term sustainable policies quite difficult. In fact, the result may be that decision makers introduce "effective" policies in a company subsystem, while ignoring the medium- and long-term implications of such decisions in the performance of the whole company. With the aim to detect the main causes underlying "myopic" fleet maintenance policies, an empirical analysis of two major Italian city bus companies has been conducted. This approach allowed the authors to make explicit the network of cause-and-effect relationships between different business subsystems and to build a system dynamics model to support city bus managers in designing and assessing alternative long-term sustainable strategies. Copyright (C) 2010 John Wiley & Sons, Ltd.