Inventory cost saving benefits from the standardization of computer modular instruments

Abstract

This article investigates the savings in inventory costs from the standardization of two computer modular instrument interface standards: NIM, an analog standard and CAMAC, a digital standard, at US nuclear laboratory installations. The major benefit from the standardization effort springs from the fact that the modular instruments are interchangeable, providing opportunities for reducing inventory costs. To that effect, the safety stock levels of instrument modules required for computer system configurations were estimated by an iterative procedure derived from a continuous Markov chain process with a one-to-one replacement policy. Since on the average, there are only two instruments of the same type per CAMAC or NIM crate, the opportunities for reducing inventory costs are a function of the number of crates and thus appear present only in medium and large systems. Large amounts of benefits of $206m (in 1981 dollars) were estimated from this successful standardization effort.