An approximate approach for the joint problem of level of repair analysis and spare parts stocking

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 twoechelon, 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

An iterative method for the simultaneous optimization of repair decisions and spare parts stocks

In the development process of a capital good, it should be decided how to maintain it once it is in the field. The level of repair analysis (LORA) is used to answer the questions: 1) which components to repair upon failure, and which to discard, 2) at which locations in the repair network to perform the repairs, and 3) at which locations to deploy resources, such as repair equipment. Next, it should be decided what amount of spare parts to store at each location in the network in order to guarantee a certain availability of the product. Usually, the LORA and the spare parts stocking problem are solved sequentially. However, solving the LORA first can lead to high spare parts costs. Therefore, we propose an iterative approach to solve the two problems jointly. We find that the total costs are lowered with 3.2% on average and almost 35% at maximum in our experiments. A cost reduction of a few percent may be worth hundreds of thousands of euros over the life cycle of a capital good

An optimal approach for the joint problem of level of repair analysis and spare parts stocking

We propose a method that can be used when deciding on how to maintain capital goods, given a product design and the layout of a repair network. Capital goods are physical systems that are used to produce products or services. They are expensive and technically complex and have high downtime costs. Examples are manufacturing equipment, defense systems, and medical devices

A New Multi Echelon Repair Network Model with Multiple Upstream Locations for Level of Repair Analysis Problem

Level of repair analysis (LORA) determines (1) the best decision during a malfunction of each product component; (2) the location in the repair network to perform the decision and (3) the quantity of required resources in each facility. Capital goods have long life cycles and their total life cycle costs are extremely high. LORA, which can be done repeatedly during the life cycle of the product, both at design and product support phase, plays an important role in minimising the total life cycle costs of capital goods. It is mostly applied to systems that operate in different geographical areas and deployed in different regions, which include different subsystems with special technology and expertise, and have a complex product structure. In this study, we propose a new mathematical model to the LORA problem, which is more comprehensive and flexible than the other pure LORA models in the literature. The proposed model uses the multiple upstream approach that allows the transfer of the components from a location in the lower echelon to the predefined locations in the upper echelon and determines the material movement paths between each facility, defining the facilities’ locations in the repair network. The performance of the proposed model is tested on benchmark instances and the results are compared with the single upstream model. Computational experiments show that the proposed model is more effective than the single upstream model and reduces the total life cycle costs by 4.85% on average, which is an enormous cost saving when total life cycle costs of capital goods are considered

Practical extensions to the level of repair analysis

The level of repair analysis (lora) gives answers to three questions that are posed when deciding on how to maintain capital goods: 1) which components to repair upon failure and which to discard, 2) at which locations in the repair network to perform each type of repairs, and 3) at which locations in the network to deploy resources, such as test equipment. The goal is to achieve the lowest possible life cycle costs. Various models exist for the lora problem. However, these models tend to be restrictive in that specic business situations cannot be incorporated, for example, having repair equipment with a capacity restriction or the occurrence of unsuccessful repairs.We discuss and model various practically relevant extensions to an existing minimum cost \ud ow formulation for the lora problem. We show the added value of these model renements in an extensive numerical experiment

Joint optimisation of inspection maintenance and spare parts provisioning: a comparative study of inventory policies using simulation and survey data

The demand for industrial plant spare parts is driven, at least in part, by maintenance requirements. It is therefore important to jointly optimise planned maintenance and the associated spare parts inventory using the most appropriate maintenance and replenishment policies. In this simulation-based study, we address this challenge in the context of the random failure of parts in service and the replacement of defective parts at inspections of period T. Inspections are modelled using the delay-time concept. A number of simultaneous periodic review and continuous review replenishment policies are compared. A paper making plant provides a real context for the presentation of our ideas. We survey practitioners working with such plant to collect real data that inform the values of parameters in the models. Our simulation results indicate that a periodic review policy with ordering that is twice as frequent as inspection is cost optimal in the context of the plant that we study. For the purpose of comparison, we also present and discuss the characteristics of the various policies considered

Multiobjective Coordination Models For Maintenance And Service Parts Inventory Planning And Control

In many equipment-intensive organizations in the manufacturing, service and particularly the defense sectors, service parts inventories constitute a significant source of tactical and operational costs and consume a significant portion of capital investment. For instance, the Defense Logistics Agency manages about 4 million consumable service parts and provides about 93% of all consumable service parts used by the military services. These items required about US$1.9 billion over the fiscal years 1999-2002. During the same time, the US General Accountability Office discovered that, in the United States Navy, there were about 3.7 billion ship and submarine parts that were not needed. The Federal Aviation Administration says that 26 million aircraft parts are changed each year. In 2002, the holding cost of service parts for the aviation industry was estimated to be US$50 billion. The US Army Institute of Land Warfare reports that, at the beginning of the 2003 fiscal year, prior to Operation Iraqi Freedom the aviation service parts alone was in excess of US$1 billion. This situation makes the management of these items a very critical tactical and strategic issue that is worthy of further study. The key challenge is to maintain high equipment availability with low service cost (e.g., holding, warehousing, transportation, technicians, overhead, etc.). For instance, despite reporting US$10.5 billion in appropriations spent on purchasing service parts in 2000, the United States Air Force (USAF) continues to report shortages of service parts. The USAF estimates that, if the investment on service parts decreases to about US$5.3 billion, weapons systems availability would range from 73 to 100 percent. Thus, better management of service parts inventories should create opportunities for cost savings caused by the efficient management of these inventories. Unfortunately, service parts belong to a class of inventory that continually makes them difficult to manage. Moreover, it can be said that the general function of service parts inventories is to support maintenance actions; therefore, service parts inventory policies are highly related to the resident maintenance policies. However, the interrelationship between service parts inventory management and maintenance policies is often overlooked, both in practice and in the academic literature, when it comes to optimizing maintenance and service parts inventory policies. Hence, there exists a great divide between maintenance and service parts inventory theory and practice. This research investigation specifically considers the aspect of joint maintenance and service part inventory optimization. We decompose the joint maintenance and service part inventory optimization problem into the supplier s problem and the customer s problem. Long-run expected cost functions for each problem that include the most common maintenance cost parameters and service parts inventory cost parameters are presented. Computational experiments are conducted for a single-supplier two-echelon service parts supply chain configuration varying the number of customers in the network. Lateral transshipments (LTs) of service parts between customers are not allowed. For this configuration, we optimize the cost functions using a traditional, or decoupled, approach, where each supply chain entity optimizes its cost individually, and a joint approach, where the cost objectives of both the supplier and customers are optimized simultaneously. We show that the multiple objective optimization approach outperforms the traditional decoupled optimization approach by generating lower system-wide supply chain network costs. The model formulations are extended by relaxing the assumption of no LTs between customers in the supply chain network. Similar to those for the no LTs configuration, the results for the LTs configuration show that the multiobjective optimization outperforms the decoupled optimization in terms of system-wide cost. Hence, it is economically beneficial to jointly consider all parties within the supply network. Further, we compare the model configurations LTs versus no LTs, and we show that using LTs improves the overall savings of the system. It is observed that the improvement is mostly derived from reduced shortage costs since the equipment downtime is reduced due to the proximity of the supply. The models and results of this research have significant practical implications as they can be used to assist decision-makers to determine when and where to pre-position parts inventories to maximize equipment availability. Furthermore, these models can assist in the preparation of the terms of long-term service agreements and maintenance contracts between original equipment manufacturers and their customers (i.e., equipment owners and/or operators), including determining the equitable allocation of all system-wide cost savings under the agreement

A unified race algorithm for offline parameter tuning

This paper proposes uRace, a unified race algorithm for efficient offline parameter tuning of deterministic algorithms. We build on the similarity between a stochastic simulation environment and offline tuning of deterministic algorithms, where the stochastic element in the latter is the unknown problem instance given to the algorithm. Inspired by techniques from the simulation optimization literature, uRace enforces fair comparisons among parameter configurations by evaluating their performance on the same training instances. It relies on rapid statistical elimination of inferior parameter configurations and an increasingly localized search of the parameter space to quickly identify good parameter settings. We empirically evaluate uRace by applying it to a parameterized algorithmic framework for loading problems at ORTEC, a global provider of software solutions for complex decision-making problems, and obtain competitive results on a set of practical problem instances from one of the world's largest multinationals in consumer packaged goods