Forecasting spare part demand using service maintenance information

Sarah Van der Auweraer*, Robert Boute

*Corresponding author for this work

Research output: Contribution to journalArticle

4 Scopus citations

Abstract

We focus on the inventory management of critical spare parts that are used for service maintenance. These parts are commonly characterised by a large variety, an intermittent demand pattern and oftentimes a high shortage cost. Specialized service parts models focus on improving the availability of parts whilst limiting the investment in inventories. We develop a method to forecast the demand of these spare parts by linking it to the service maintenance policy. The demand of these parts originates from the maintenance activities that require their use, and is thus related to the number of machines in the field that make use of this part (known as the active installed base), in combination with the part's failure behaviour and the maintenance plan. We use this information to predict future demand. By tracking the active installed base and estimating the part failure behaviour, we provide a forecast of the distribution of the future spare parts demand during the upcoming lead time. This forecast is in turn used to manage inventories using a base-stock policy. Through a simulation experiment, we show that our method has the potential to improve the inventory-service trade-off, i.e., it can achieve a certain cycle service level with lower inventory levels compared to the traditional forecasting techniques for intermittent spare part demand. The magnitude of the improvement increases for spare parts that have a large installed base and for parts with longer replenishment lead times.

Original languageEnglish (US)
Pages (from-to)138-149
Number of pages12
JournalInternational Journal of Production Economics
Volume213
DOIs
StatePublished - Jul 2019

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Keywords

  • Forecasting
  • Installed base
  • Inventory management
  • Service maintenance
  • Spare parts

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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