Product Deterioration Based Demand Forecasting and Service Supply Model for MRO Service Chain

Abstract

As one kind of product service supply chains, maintenance, repair, and overhaul (MRO) service chain manages the physical industrial products and the related MRO services, and performs MRO service supply activities depending on demand planning and operational measures. The spare part and service demands in MRO service chain are typically uncertain because of product deterioration and random failure. The existing works mainly focus on providing the best possible modeling of demand characteristics (such as price, service level, and stock level) without aiming at demand generation process itself. We try to leverage the stochastic process based product deterioration model to characterize the generation of such uncertain demands, and then develop a predictive and proactive service policy. In our model, geometric process is combined with Gamma process and stochastic monotonicity of geometric process is utilized to quantify product's accelerated deterioration. Based on the developed accelerated deterioration model, the uncertain demands in MRO service chain can be forecasted, and the analytic expression of two-dimensional joint policy involving the scheduled service plan (inspection interval) and the stochastic service plan (replacement time) is derived. Model demonstration on MRO service management of continuous caster illustrates the feasibility and practicality of the proposed method.