Distributional Modeling of Pipeline Leakage Repair Costs for a Water Utility Company

Authored by: Steve Su

Handbook of Fitting Statistical Distributions with R

Print publication date:  October  2010
Online publication date:  April  2016

Print ISBN: 9781584887119
eBook ISBN: 9781584887126
Adobe ISBN:


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A fundamental problem of measuring the uncertainty and risk of asset repair costs in practice is addressed in this chapter. By fitting generalized lambda distributions (GLD) to empirical data using the starship and numerical maximum likelihood methods, this chapter examines the impact of factors such as time of pipe leakage, age of pipe, pipe diameter, pipe location, and pipe length on the empirical probability distributions of pipe repair costs. This provides important management information regarding the impact that different factors have on the range and the likelihood of extreme costs. Additionally, the use of GLD can be used in conjunction with Monte Carlo simulations and other strategies to set monthly prices in a rational manner, allowing the water utility company to breakeven their basic leak repair costs in the long term within a specified level of confidence.

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