This report proposes a way to think about the stockage decisions service maintenance depots must make. The approach involves defining the value of each part so the costs of parts can be related to their effects on fixing end-items. Very simply, if a part breaks frequently and tends to hold up the repair of an expensive end-item, then a spare is very valuable. Using the measure of value, the authors develop a rank-ordered list of repair parts: The higher it is on the list, the more valuable the part is to reducing the value of the repair pipeline. The stockage problem posed is an instance of the classic knapsack problem; the algorithm is a heuristic solution, a greedy algorithm. Simulation tests show that the method does a good job of setting authorized stockage levels. The simulations also suggest that large savings may be possible, and they identify the weapon systems for which savings are likely to accrue. The results make the case for experimenting with the method at a depot or a remanufacturing site.
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