Modeling the Interaction between Operational and Financial Decisions in the Inventory Pooling of Repairable Spare Parts Problem

Equipment-intensive industries such as airlines, nuclear power plants, various process and manufacturing plants using complex machineries are often confronted with the difficult task of maintaining a high system performance while controlling their inventory holding cost. An important type of components in such industries are called repairable items. The typical problem is to determine the optimal stocking level of spare parts. An insufficient stock of spare parts can lead to an excessive downtime cost. On the other hand, maintaining an excessive number of spare parts increases the cost of tying up capital in non-revenue-generating spare parts inventories.