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Link to publication Citation for published version (APA):Basten, R. J. I., Heijden, van der, M. C., & Schutten, J. M. J. (2008). A minimum cost flow model for level of repair analysis. (BETA publicatie : working papers; Vol. 254). Enschede: Universiteit Twente. General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.• Users may download and print one copy of any publication from the public portal for the purpose of private study or research.• You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal ? Take down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Abstract Given a product design and a repair network for capital goods, a level of repair analysis determines for each component in the product (1) whether it should be discarded or repaired upon failure and (2) at which location in the repair network to do this. In this paper, we show how the problem can be modelled as a minimum cost flow problem with side constraints. Advantages are that (1) solving our model requires less computational effort than solving existing models and (2) we achieve a high model flexibility, i.e., many practical extensions can be added. Furthermore, we analyse the added value of modelling the exact structure of the repair network, instead of aggregating all data per echelon as is common in the literature. We show that in some cases, cost savings of over 7% can be achieved. We also show when it is sufficient to model the repair network by echelons only, which requires less input data.Keywords: Maintenance, Supply chain management, Level of repair analysis, Mixed integer programming, Minimum cost flows Problem setting and literatureFor capital goods, such as military naval equipment, mri-scanners, or trains, customers increasingly take total life cycle costs (lcc) into account in their purchasing decisions (Ferrin and Plank, 2002). Also, we see a trend that customers outsource activities for system upkeep to the original equipment manufacturer (oem) using service contracts that guarantee a certain service level against fixed yearly costs. For the oem, this can be attractive, since selling services is generally more profitable than selling products (Deloitte, 2006;Murthy et al., 2004;Oliva and Kallenberg, 2003). This means that it becomes important for the oem to take the costs of maintenance into account when designing new products. Costs of more reliable components can be earned back by lower maintenance costs during the product life cycle.Generally, capital goods are repaired by replacement, which means that a failed component is removed from the sy...

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Given a product design and a repair network, a level of repair analysis (LORA) determines for each component in the product (1) whether it should be discarded or repaired upon failure and (2) at which echelon in the repair network to do this. The objective of the LORA is to minimize the total (variable and fixed) costs. We propose an IP model that generalizes the existing models, based on cases that we have seen in practice. Analysis of our model reveals that the integrality constraints on a large number of binary variables can be relaxed without yielding a fractional solution. As a result, we are able to solve problem instances of a realistic size in a couple of seconds on average. Furthermore, we suggest some improvements to the LORA analysis in the current literature.

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