The value of reliability

Mogens Fosgerau; Anders Karlström

doi:10.1016/j.trb.2009.05.002

The value of reliability

Mogens Fosgerau^*, Anders Karlström

^*Corresponding author for this work

181 Citations (Scopus)

Abstract

We derive the value of reliability in the scheduling of an activity of random duration, such as travel under congested conditions. Using a simple formulation of scheduling utility, we show that the maximal expected utility is linear in the mean and standard deviation of trip duration, regardless of the form of the standardised distribution of trip durations. This insight provides a unification of the scheduling model and models that include the standard deviation of trip duration directly as an argument in the cost or utility function. The results generalise approximately to the case where the mean and standard deviation of trip duration depend on the starting time. An empirical illustration is provided.

Original language	English
Journal	Transportation Research Part B: Methodological
Volume	44
Issue number	1
Pages (from-to)	38-49
Number of pages	12
ISSN	0191-2615
DOIs	https://doi.org/10.1016/j.trb.2009.05.002
Publication status	Published - Jan 2010

Keywords

Random duration
Reliability
Scheduling
Time
Variability
Welfare

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10.1016/j.trb.2009.05.002

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AB - We derive the value of reliability in the scheduling of an activity of random duration, such as travel under congested conditions. Using a simple formulation of scheduling utility, we show that the maximal expected utility is linear in the mean and standard deviation of trip duration, regardless of the form of the standardised distribution of trip durations. This insight provides a unification of the scheduling model and models that include the standard deviation of trip duration directly as an argument in the cost or utility function. The results generalise approximately to the case where the mean and standard deviation of trip duration depend on the starting time. An empirical illustration is provided.

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KW - Time

KW - Variability

KW - Welfare

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The value of reliability

Abstract

Keywords

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