Journal
ANNALS OF OPERATIONS RESEARCH
Volume 224, Issue 1, Pages 121-145Publisher
SPRINGER
DOI: 10.1007/s10479-012-1188-0
Keywords
Spare parts; Inventories; Level of repair analysis; Optimization; Heuristic
Categories
Funding
- Innovation-Oriented Research Programme 'Integral Product Creation and Realization (IOP IPCR)' of the Netherlands Ministry of Economic Affairs, Agriculture and Innovation
- Lloyd's Register Educational Trust
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For the spare parts stocking problem, generally METRIC type methods are used in the context of capital goods. A decision is assumed on which components to discard and which to repair upon failure, and where to perform repairs. In the military world, this decision is taken explicitly using the level of repair analysis (LORA). Since the LORA does not consider the availability of the capital goods, solving the LORA and spare parts stocking problems sequentially may lead to suboptimal solutions. Therefore, we propose an iterative algorithm. We compare its performance with that of the sequential approach and a recently proposed, so-called integrated algorithm that finds optimal solutions for two-echelon, single-indenture problems. On a set of such problems, the iterative algorithm turns out to be close to optimal. On a set of multi-echelon, multi-indenture problems, the iterative approach achieves a cost reduction of 3 % on average (35 % at maximum) as compared to the sequential approach. Its costs are only 0.6 % more than those of the integrated algorithm on average (5 % at maximum). Considering that the integrated algorithm may take a long time without guaranteeing optimality, we believe that the iterative algorithm is a good approach. This result is further strengthened in a case study, which has convinced Thales Nederland to start using the principles behind our algorithm.
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