On the relationship of spare parts inventory policies with Total Cost of Ownership of industrial assets

Abstract

This work presents the results of a simulation study aimed at characterizing the relationship of spare parts inventory policies with Total Cost of Ownership of industrial plants. The study is motivated by the expectation that several spare parts management decisions cause important effects in the long-term profitability of industrial assets. Such decisions may regard, amongst the others, the initial provisioning, the inventory policy and the end-of-life acquisition. This work adopts simulation to test a specific spare parts inventory policy, i.e. a continuous review system, with the final purpose to assess its effects on the operational performance of an industrial comminution plant and, consequently, on its Total Cost of Ownership.

Spare parts management in industry 4.0 era: a literature review

“…It plays a significant role in decision making of various operations in supply chain involving initial provisioning, inventory policy and end-of-life acquisition (Duran et al. , 2016a, b). A right balance between spare parts criticality and total inventory cost can be analyzed by applying a hybrid approach merging AHP and multicriteria decision making joined with e-constraints optimization.…”

Evaluating Climatic Influences on the Technical Performance of Built Infrastructure Assets

“…Throughout the asset's life cycle, facility managers continue to make decisions up until disposal, at which time they need to replace the asset entirely. All of these decisions and associated costs can be evaluated using Total Cost of Ownership (TCO) models, which calculate all costs incurred by owners of any physical assets over the asset's lifespan (Durán et al 2016).…”