Optimal provisioning strategies for slow moving spare parts with small lead times

Abstract

When an expensive piece of equipment is bought, spare parts can often be bought at a reduced price. A decision must be made about the initial provisioning of spare parts. Furthermore, if at a certain time the stock drops to zero, because a number of failures have occurred, a decision must be made about the number of parts to be ordered. We focus on one specific expensive slow-moving part that is essential for the functioning of the equipment. The lead time of that part is small compared to its lifetime. We seek an ordering strategy for this part that covers the entire lifetime. Such a strategy should also be applicable to cases where there is uncertainty about the lifetime of the machine, the reliability of the components and the cost of failure. The main result is the development of a simple strategy that performs well in almost all cases. Furthermore, this strategy can easily deal with uncertainty and changes in the parameters.

Keywords:

• inventory
• investment
• maintenance
• modelling
• optimization
• repair