Modeling diminishing marginal returns in ahierarchical inventory system of reparable spare parts

W.L. Zorn, R.F. Deckro and L.J. Lehmkuhl

Annals of Operations Research, 1999, vol. 91, issue 0, 319-337

Abstract: Safety stock levels of reparable spare parts in a hierarchical inventory structure aredetermined relative to the marginal improvement to end item availability provided by eachstock level. This research is focused on the United States Air Force (USAF) hierarchicalinventory and repair system as modeled by the Multi‐Echelon‐Technique‐for‐Recoverable‐Item‐Control (METRIC) methodology. A piecewise linear modeling framework is introducedbased on output from the Aircraft Availability Model (AAM), a model that is part of theMETRIC family of models. The underlying nature of the piecewise linear formulation providesinteger stock levels with continuous decision variables. This model provides the highestattainable end‐item availability relative to an inventory of reparable spare parts. Additionally,the model provides a robust platform for the conduct of extensive post‐optimality analysis.While this research focuses on the METRIC family of models, the methodology developedmay be applied to any hierarchical inventory of reparable spares that conforms to the model’sunderlying mathematical structure. Copyright Kluwer Academic Publishers 1999

Date: 1999
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DOI: 10.1023/A:1018962126187

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