Optimal algorithm to determine the spare inventory level for a repairable-item inventory system

Abstract

This article concerns the problem of determining the optimal spare inventory level for a multiechelon repairable-item inventory system, which has several bases and a central depot. When an item fails, it is dispatched to a repair facility, and a spare, if available, is plugged in immediately. We develop an optimal algorithm to find the spare inventory level which minimizes the total expected cost and simultaneously satisfies a specified minimum service rate. The algorithm is applied to examples with good results.