Reducing Aircraft Down for Lack of Parts with Sporadic Demand

In the military aerospace environment, certain repair parts are infrequently demanded, but stocked because they are essential to maintaining a weapon system critical to the war-fighter. Because of their sporadic demand, it is difficult to decide when to buy these items and in what quantities. As systems become more reliable and failure rates decrease, the number of these infrequently demanded parts is likely to grow. Earlier studies found the Peak ordering policy the author invented significantly reduced wholesale wait-time and backorders. Rigorous new experiments confirm the benefits of the Peak policy, and show it can reduce retail wait-time and backorders as well. By considering the distribution of retail backorders over an aircraft squadron, we estimate the resulting reduction in the number of aircraft down for lack of parts. We also analyze the policy's near-term effect on inventory value and procurement workload after 5 years of development and review, the Peak policy is mature enough for implementation. Presented at the MORS Symposium (72nd) held in Monterey, CA on 22-24 Jun 2004.