Impact of parameter estimation inaccuracies on a repairable item system

Abstract

Inventory control for spare parts is an element of life cycle management for machines. For reliable spare part supply and low costs for part procurement and recycling, spares are provided by closed-loop supply chains. After removal from the machine broken parts are repaired and put back into stock. Estimations of demand level, repair time and replenishment time are difficult to make and can be inaccurate, incurring suboptimal stock levels. A simulation model was built to analyze the effects of varying input parameters and their impact on supply chain performance.