The Economic Management of Physical Assets: The Practical Case of an Urban Passenger Transport Company in Portugal
Round 1
Reviewer 1 Report
The paper deals with an interesting topic of the economic management of tangible assets. The paper falls within the editorial scope of Sustainability and could be considered for publication. However, I think some sections need improvement:
- Introduction: Although the authors provide context for the paper, the literature review could be improved. How will your study add to the knowledge in this area? Authors explained well that there is a gap in this area that needs to be addressed (see page 4, lines 73-83). However, please also address the knowledge/research gap in more detail. The authors have explained what some previous studies have done. However, they should be more explicit about the research gap as mentioned above. The authors should improve the scientific justification in order to improve the scientific soundness. What are the main research objectives/questions?
- Though, asset management is still evolving in terms of scientific contributions, and there is lack of research in many areas of it, several recent researches have contributed to this filed and should be considered. For example, page 2, lines 29-35. Authors could consider prior research papers to establish the scientific background on asset management and different aspects (e.g., in relation to sustainability, to different type of organizational performances that are important for the purpose of the present study, etc.).
The following paper connects physical asset management practices to sustainability performance, namely economic, environmental, and employee-related social performance.
Maletič, D., Maletič, M., Al-Najjar, B., & Gomišček, B. (2018). Development of a model linking physical asset management to sustainability performance: An empirical research. Sustainability, 10(12), 4759.
Next paper provides a systematic review regarding physical asset management form a sustainable perspective.
Sandu, G., Varganova, O., & Samii, B. (2022). Managing physical assets: a systematic review and a sustainable perspective. International Journal of Production Research, 1-23.
Furthermore, prior research has also been investigating the relationship between asset management and business performance.
Lima, E. S., McMahon, P., & Costa, A. P. C. S. (2021). Establishing the relationship between asset management and business performance. International Journal of Production Economics,232, 107937.
- Research methodology: Although authors briefly mentioned from where variables are obtained, more in deep explanation is needed.
Sections 3.2 – 3.7. References should be added alongside the description of the methods. More justification is needed to provide readers information why these methods should be used to investigate the economic management of physical assets.
- Case study: please explain how you can generalize the results based on a case study? Please explain the selection criteria for the selected organization. Why did you choose to apply the methods to the case of a bus company? Be more explicit in describing the case study methodology to avoid confusion between application and case study.
- Obvious theoretical implications are absent. Please, discuss the theoretical implications of your study. Authors should interpret results of the study in light of what was already known about the subject of the study.
- As for the managerial implications. I would expect lections that are more precise for practitioners. How your results contribute to understanding of the studied research problem, and what managers can learn from your results should be highlighted to a greater extent.
- Limitations of the study are not highlighted in the Conclusion section.
Author Response
Reviewer #1
Manuscript Number: sustainability-2201479
Title: The economic management of physical assets: the practical case of an urban passenger transport company in Portugal
The paper deals with an interesting topic of the economic management of tangible assets. The paper falls within the editorial scope of Sustainability and could be considered for publication. However, I think some sections need improvement:
1- Introduction: Although the authors provide context for the paper, the literature review could be improved. How will your study add to the knowledge in this area? Authors explained well that there is a gap in this area that needs to be addressed (see page 4, lines 73-83). However, please also address the knowledge/research gap in more detail. The authors have explained what some previous studies have done. However, they should be more explicit about the research gap as mentioned above. The authors should improve the scientific justification in order to improve the scientific soundness. What are the main research objectives/questions?
R: The literature and text has been improved, according to the reviewer suggestion.
2- Though, asset management is still evolving in terms of scientific contributions, and there is lack of research in many areas of it, several recent researches have contributed to this filed and should be considered. For example, page 2, lines 29-35. Authors could consider prior research papers to establish the scientific background on asset management and different aspects (e.g., in relation to sustainability, to different type of organizational performances that are important for the purpose of the present study, etc.
The following paper connects physical asset management practices to sustainability performance, namely economic, environmental, and employee-related social performance.
Maletič, D., Maletič, M., Al-Najjar, B., & Gomišček, B. (2018). Development of a model linking physical asset management to sustainability performance: An empirical research. Sustainability, 10(12), 4759.
Next paper provides a systematic review regarding physical asset management form a sustainable perspective.
Sandu, G., Varganova, O., & Samii, B. (2022). Managing physical assets: a systematic review and a sustainable perspective. International Journal of Production Research, 1-23.
Furthermore, prior research has also been investigating the relationship between asset management and business performance.
Lima, E. S., McMahon, P., & Costa, A. P. C. S. (2021). Establishing the relationship between asset management and business performance. International Journal of Production Economics,232, 107937.
R: The literature and text has been improved, according to the reviewer suggestion.
This advice was followed. First, in Section 1, we add that companies “seek to improve improve the value of their assets by investing in asset management in order to obtain better returns for their business (Lima et al. 2021)”.
Already regarding the linkage between physical asset management (PAM) and sustainability we add that “literature shows, precisely, that there is a strong linkage”. Then we cite Maletič et al. (2018) that shows that “there are some PAM areas in which managers should focus on in order to optimize costs, performance, and risk exposures concerning the physical assets, and therefore enhance sustainability performance”.
Then, in section 2, we return to this topic in more depth using not only the work f Maletič et al. (2018) but also the conclusion of Sandu et al. (2022)
3- Research methodology: Although authors briefly mentioned from where variables are obtained, more in deep explanation is needed.
R: The Research methodology has been improved, according to the reviewer suggestion.
“3. Research methodology: Applied models
It is essential to emphasize that wisdom is acquired in different ways, so scientific research seeks to be increasingly rigorous and acceptable since it is based on a rational process of the descriptive and explanatory power of facts and phenomena (Fortin & Salgueiro, 2009). To analyse the determinants of the economic management of physical assets of the urban transport company under study, they are used econometric models for equipment replacement and their respective methods of measurement by several authors, such as (Ardalam, 2000; Pinar and Hartman, 2004; Farinha, 2011; Raposo et al., 2019).
However, the data used to analyse the economic life of the physical assets of the company under study were collected through the company's own database (real data) and governmental statistical data platforms, namely National Institute of Statistics (Instituto Nacional de Estatística - INE) and PORDATA.
The econometric models of equipment replacement and their optimization methods will be discussed below.”
4- Sections 3.2 – 3.7. References should be added alongside the description of the methods. More justification is needed to provide readers information why these methods should be used to investigate the economic management of physical assets.
R: The Sections 3.2 – 3.7 has been improved, according to the reviewer suggestion.
“Example: The values of most of these variables are obtained through the historic values, with the exception of the assignment value. In this case, it will be necessary to obtain the market value for each specific piece of equipment, which may prove difficult for many assets. Alternatively, various types of devaluation can be simulated, such as the following ones (Farinha, 2018):
- Linear depreciation method;
- Sum of digits method;
- Exponential method…..”
5- Case study: please explain how you can generalize the results based on a case study? Please explain the selection criteria for the selected organization. Why did you choose to apply the methods to the case of a bus company? Be more explicit in describing the case study methodology to avoid confusion between application and case study.
R: The case study was better explained, according to the reviewer suggestion. The authors have several case studies related to transport companies, they have also carried out studies with the same models in similar companies, as well as in other industrial sectors.
6- Obvious theoretical implications are absent. Please, discuss the theoretical implications of your study. Authors should interpret results of the study in light of what was already known about the subject of the study.
R: The discussion of the results has been improved, according to the reviewer suggestion.
7- As for the managerial implications. I would expect lections that are more precise for practitioners. How your results contribute to understanding of the studied research problem, and what managers can learn from your results should be highlighted to a greater extent.
R: The conclusions of the study were improved, and the objectives of this study were highlighted, how the study can help physical asset managers, namely managers of transport companies, according to the reviewer suggestion.
8- Limitations of the study are not highlighted in the Conclusion section.
R: This advice was followed (see p. 24 of the revised version of the manuscript).
Thanks for your extremely important contributions.
We read carefully your questions and contributions and we uploaded a paper that we hope answer to all of them.
Author Response File: 
Author Response.docx
Reviewer 2 Report
The paper will benefit from copy-editing. Further, paragraphs in general seem disjoint and hence do not present the readers with a clear idea about the main ideas and results of the paper.
Is the paper about an actual company or a fictitious company?
Can the authors use some basic econometric estimations as OLS?
There are a lot of self citing.
Line 59: Life Cycle Assessment (LCA) -- where did this come from? It should be properly introduced/defined first.
Line 77: Portuguese cities -- which city
Line 112: Life Cycle Cost of an Asset (LCC) -- is this the definition or research findings?
Line 119: Activity-Based Costing (ABC) – define
Line 123: LCC analysis -- really need to explain what this analysis is about
Line 151: Equivalent Uniform Annual Cost – for? Define
Line 190-192: explain more
Line 198-201: define
Line 221: solution for what problem?
Line 228: very vague
Line 229: reference missing parentheses
Line 233: Fuzzy Logic and the Support Vector Machine – define/explain
Line 252-253: variables are obtained through the historic values – what is the data source?
Line 258 – 262: largely copied and pasted from previous pages
Line 324: what is the theta in the formula?
Line 327: apparent rate – explain this more. What is the theoretical basis for the determination of this term?
Line 401+: 7 of them. Prepare a table of all these methods and compare their strengths and weaknesses
Line 405: apparent rate of 8% was considered – why? What is the rate that the company is actually using?
Line 413+: We really need to know more about this company. What are their sales, depreciation expenses, etc…
Author Response
Reviewer #2
Manuscript Number: sustainability-2201479
Title: The economic management of physical assets: the practical case of an urban passenger transport company in Portugal
1- The paper will benefit from copy-editing. Further, paragraphs in general seem disjoint and hence do not present the readers with a clear idea about the main ideas and results of the paper.
R: The article was revised and improved, according to the reviewer suggestion.
2- Is the paper about an actual company or a fictitious company?
R: It is about an actual company, namely SMTUC of Coimbra which is a municipal company dedicated to ensuring the Public Road Transport Service for Passengers in the Municipality of Coimbra. We clarified this matter in the text of the article, according to the reviewer suggestion.
3- Can the authors use some basic econometric estimations as OLS?
R: We apologize, we believe we have used the most appropriate methods for the objectives outlined. Although, in fact, it could be interesting to carry out more estimates using other different methods, as is the case, for example, of the well-known OLS method (suggested), we believe that this would mean going beyond the limits and objectives of this work.
4- There are a lot of self citing.
R: We apologize, but we would like to keep it because: the authors have several case studies related to transport companies, they have also carried out studies with the same models in similar companies, as well as in other industrial sectors.
5- Line 59: Life Cycle Assessment (LCA) -- where did this come from? It should be properly introduced/defined first.
R: Text and definitions have been improved, according to the reviewer suggestion.
6- Line 77: Portuguese cities -- which city
R: The revised version of the manuscript answer this question. The city is Coimbra.
7- Line 112: Life Cycle Cost of an Asset (LCC) -- is this the definition or research findings?
R: Text and definitions have been improved, according to the reviewer suggestion.
8- Line 119: Activity-Based Costing (ABC) – define
R: Text and definitions have been improved, according to the reviewer suggestion.
9- Line 123: LCC analysis -- really need to explain what this analysis is about
R: Text and definitions have been improved, according to the reviewer suggestion.
10- Line 151: Equivalent Uniform Annual Cost – for? Define
R: Text and definitions have been improved, according to the reviewer suggestion.
11- Line 190-192: explain more
R: The text has been improved of according to the reviewer suggestion.
12- Line 198-201: define
R: The text has been improved of according to the reviewer suggestion.
13- Line 221: solution for what problem?
R: The text has been improved of according to the reviewer suggestion.
14- Line 228: very vague
R: The text has been improved of according to the reviewer suggestion.
15- Line 229: reference missing parentheses
R: The text has been improved of according to the reviewer suggestion.
16- Line 233: Fuzzy Logic and the Support Vector Machine – define/explain
R: Text and definitions have been improved, according to the reviewer suggestion.
17- Line 252-253: variables are obtained through the historic values – what is the data source?
R: The text has been improved of according to the reviewer suggestion. (Yes, these are historical data, the data sources were included in the text)
18- Line 258 – 262: largely copied and pasted from previous pages
R: The text has been improved of according to the reviewer suggestion.
19- Line 324: what is the theta in the formula?
R: The text has been improved of according to the reviewer suggestion (we define theta).
20- Line 327: apparent rate – explain this more. What is the theoretical basis for the determination of this term?
R: The text has been improved of according to the reviewer suggestion. (We explain the apparent rate)
21- Line 401+: 7 of them. Prepare a table of all these methods and compare their strengths and weaknesses
R: The text has been improved of according to the reviewer suggestion. (We prepared a table)
22- Line 405: apparent rate of 8% was considered – why? What is the rate that the company is actually using?
R: Rate of 8% (used by the company).
23- Line 413+: We really need to know more about this company. What are their sales, depreciation expenses, etc…
R: A: Some data we are not allowed to disclose, even so we leave the link to the various documents (financial documents and others) that are public and where you can consult.
Link: https://www.smtuc.pt/quem-somos/documentos/
Thanks for your extremely important contributions.
We read carefully your questions and contributions and we uploaded a paper that we hope answer to all of them.
Author Response File: Author Response.docx
Round 2
Reviewer 1 Report
Thank you for revised manuscript. Authors followed the comments, but in some parts they did not understand the comments:
6- Obvious theoretical implications are absent. Please, discuss the theoretical implications of your study. Authors should interpret results of the study in light of what was already known about the subject of the study.
R: The discussion of the results has been improved, according to the reviewer suggestion.
The discussion is still missing. It was not meant to improve the discussion of the results. Interpret your results in the light of the past research in this field. It should focus on explaining and evaluating what you found, showing how it relates to your literature review (therefore to prior studies).
Author Response
Dear Reviewer
The answer to your questions is highlited in yellow colour.
Thanks for your comments and contributions.
Warm Regards.
The Authors
Reviewer 2 Report
Thanks for addressing my concerns.
Author Response
Dear Reviewer
The answer to your questions is highlited in yellow colour.
Thanks for your comments and contributions.
Warm Regards.
The Authors
