Patrik Alfredsson: Spares Inventory Modeling and Optimization - Classic Theory and Supply Flexibility Extensions

Spares Inventory Modeling concern models to predict the resulting system operational effectiveness (operational availability) for a given logistic support concept including stock locations keeping safety stock of spares. Spares Optimization concerns finding optimal spares allocations (safety stocks per item and location) yielding maximal operational availability for a given investment in spares (or more generally logistics support cost). Around 1970 classic models like METRIC and OPUS were presented. Over the years these models have been extended and improved, e.g., regarding generality and in terms of model accuracy. However, these models have relied on some restricting assumptions, e.g, regarding supply flexibility. We will present how we have worked on trying to relax these assumptions. Applying different types of supply flexibility within the logistics support concept can dramatically reduce the required investment (cost) to sustain a certain availability performance.