Integrating Reliability Centered Maintenance and Spare Parts Stock Control

Willem van Jaarsveld and Rommert Dekker

No EI 2010-16, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: In the classical approach to determine how many spare parts to stock, the spare parts shortage costs or the minimum fill rate are a key factor. A difficulty with this approach lies in the estimation of these shortage costs or the determination of appropriate minimum fill rates. In an attempt to overcome this problem, we propose to use the data gathered in reliability centered maintenance studies to determine shortage costs. We discuss benefits of this approach. At the same time, the approach gives rise to complications, as the RCM study determines downtime costs of the underlying equipment, which have a complex relation with the shortage cost for spare parts in case multiple pieces of equipment have different downtime costs. A further complication is redundancy in the equipment. We develop a framework that enables the modelling of these more complicated systems. We propose an approximative, analytic method based on the model that can be used to determine minimum stock quantities in case of redundancy and multiple systems. In a quantitative study we show that the method performs well. Moreover, we show that including redundancy information in the stocking decision gives significant cost benefits.

Keywords: inventory control; stock control (search for similar items in EconPapers)
Date: 2010-03-29
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