Estimating obsolescence risk from demand data - a case study

Abstract

In this paper obsolescence of service parts is analyzed in a practical environment. Basedon the analysis, we propose a method that can be used to estimate the risk of obsolescenceof service parts. The method distinguishes groups of service parts. For these groups, therisk of obsolescence is estimated using the behavior of similar groups of service parts inthe past. The method uses demand data as main information source, and can therefore beapplied without the use of an expert's opinion. We will give numerical values for the risk ofobsolescence obtained with the method, and the e®ects of these values on inventory controlwill be examined.inventory;forecasting;obsolescence;spare parts