Evaluating the impact of cannibalization on fleet performance

Organizations that utilize fleets of expensive repairable equipment are faced with numerous challenges related to the specification of maintenance policies and the allocation of maintenance resources. The associated maintenance decisions can have a drastic impact on fleet performance. Due to the significant acquisition costs associated with the components that comprise the units of equipment in the fleet, cannibalization is often used in the absence of available spare parts to enable fleet maintenance managers to satisfy fleet performance constraints such as readiness requirements. This research is focused on the development and analysis of a closed‐network, discrete‐event simulation model that is used to assess the impacts of cannibalization, small spare parts inventories and maintenance‐induced damage on a fleet of systems. Using numerical examples, we demonstrate the comparison between cannibalization and the investment in limited spare parts inventories. We evaluate fleet performance using average readiness and total maintenance cost. Specifically, we demonstrate that investments in spare parts inventories can reduce the need for and value of cannibalization. However, our results also support the use of cannibalization as a low‐cost alternative to investing in expensive spare parts. We also explore the impact of damage induced by maintenance on fleet performance. Specifically, we demonstrate that maintenance‐induced damage can reduce the benefit of cannibalization while drastically increasing maintenance expenditures. Copyright © 2006 John Wiley & Sons, Ltd.