Models and Algorithms for Repair Parts Investment and Management

This report proposes a way to think about the investments and operating decisions service maintenance depots must make, distinguishing between a long-run (investment) problem and a short-run (operating) problem. The basis of the authors' approach to both problems involves defining the value of each part or supply action so the costs of parts or supply actions can be related to their effects, thereby permitting managers to select courses of action that maximize value given the cost of the actions. For the long-term problem, the approach attributes value to the units of authorized stock in terms of the effect they have on the value of the repair pipeline: efficient choices yield a cheap repair pipeline. For the short-run problem, the approach attributes value to supply actions (e.g., speedup of delivery of due-in items) in terms of the effect they have on the availability of aircraft at the end of a specific time horizon. For each problem, the authors provide the relevant definition of value, an algorithm to maximize value for a given cost, and methods for computing value.