Modelling, analysis and improvement of an integrated chance-constrained model for level of repair analysis and spare parts supply control

Abstract

In traditional practices, maintenance system and spare parts inventory control are usually considered in isolation, resulting in suboptimality. In a military system, the level of repair analysis (LORA) is often employed to help operate its repair networks. In this paper, we consider an integrated LORA and inventory control problem and formulate this problem as a mixed-integer nonlinear programming problem with chance constraints. Two second-order cone constraints are proposed to approximate the chance constraints. Furthermore, we propose an outer approximation (OA) algorithm based on the OA cuts. Extensive numerical results show that the OA algorithm significantly improves the computational efficiency under various types of components and network complexity. Next, we investigate the influence of service level and resource capacity, and propose the findings. Our results indicate that a higher service level leads to steeper costs, more resources, larger storage and heavier repair burdens at operating sites. Moreover, enhancements in resource capacity from the status quo lead to improvements in repairs and shrinkage in discards, bringing direct economic benefits. The insights extend to uncertain settings. It may be initially counterintuitive for many practitioners that demand uncertainty poses relatively subtle impacts.