A multi-item maintenance center inventory model for low-demand reparable items

In many military and commercial contexts, complex equipment undergoes scheduled maintenance overhauls at regular intervals during which all failed components are replaced. Failure to have replacements on hand for all failed parts requires emergency measures at premium cost. When reparable parts are highly reliable and expensive, both holding and shortage costs are high. This model determines the reparable parts inventory for a maintenance center under three alternative criteria: (1) maximizing job-completion rate subject to constraint on total holding costs, (2) minimizing total holding costs plus expected job noncompletion costs, and (3) minimizing total holding costs subject to a required minimum job-completion rate. Exact solutions may be obtained using dynamic programming. Approximate solutions, found easily by marginal analysis, have readily computed bounds on possible error. The solution methods for the three formulations are illustrated in a simple example.