This book focuses on the tactical planning level for spare parts management. It describes a series of multi-item inventory models and presents exact and heuristic optimization methods, including greedy heuristics that work well for real, life-sized problems. The intended audience consists of graduate students, starting scholars in the field of spare parts inventory control, and spare parts planning specialists in the industry.

In individual chapters the authors consider topics including: a basic single-location model; single-location models with multiple machine types and/or machine groups; the multi-location model with lateral transshipments; the classical METRIC model and its generalization to multi-indenture systems; and a single-location model with an explicit modeling of the repair capacity for failed parts and the priorities that one can set there.

Various chapters of the book are used in a master course at Eindhoven University of Technology and in a PhD course of the Graduate Program Operations Management and Logistics (a Dutch network that organizes PhD courses in the field of OM&L). The required pre-knowledge consists of probability theory and basic knowledge of Markov processes and queuing theory.  End-of-chapter problems appear for all chapters, with some answers appearing in an appendix.

Spare parts inventory is a difficult problem, including the supply chain elements of maintaining inventories of numerous spare parts. In today’s global economy, spare parts are never next door, but can be across hemispheres. In addition to distance, the sheer volume of spare parts that are required to keep complex systems operational is huge — systems like the military, transportation, and industrial businesses include an immense number of separate parts many of which are worn out through use over time. Added to these complexities are the stochastic problems associated with budget constraints and the timing of maintaining inventory levels of the consumable spare parts of an operational system.

SYSTEMS APPROACH TO BUDGET-CONSTRAINED SPARE PARTS MANAGEMENT develops a variety of multi-item models that optimize spare parts inventories so that target availability levels for specific systems and machine domains are met with minimal costs. The contributions of this systematic book treatment are as follows:

• Multi-item inventory models for the optimization of spare parts stock;

• Target availability levels for machines installed in the field are met against minimal costs for inventory holding of spare parts and for different forms of emergency shipments;

• Specific algorithms that produce optimal or close-to-optimal solutions for real-world problems;

• Case applications are provided for all of the primary types of models;

• Insights are developed for strategic decisions shipping decisions and these decisions are explored for possible critical-level policies (rationing policies) in situations with multiple classes of customers.