Maintenance Material Control

Abstract

One critical cost of maintenance is investment in spares and materials. If the investment becomes excessive, the results are high capital costs and high maintenance costs. On the other hand, if the spares and material needed for repair and servicing the equipment are not available when needed, the cost of down time will increase immensely. Efforts to balance the cost of stocking maintenance material and spares against the cost of down time are needed to achieve an effective maintenance material control system. This chapter describes approaches for developing a maintenance material control system that will help provide the needed level of maintenance in an economical manner.

Exercises

• 1. The following spares are kept in inventory at a plant. Their annual use rate and unit price are shown in the following table. Classify them as class “A,” “B,” or “C” items. Then suggest a policy for controlling each class.

  Spare part no.	Annual use (units)	Cost per unit
  S01	5000	17
  S02	17,000	51
  S03	6000	17
  S04	4000	75
  S05	11,000	200
  S06	60,000	9
  S07	12,000	60
  S08	28,000	50
  S09	4000	18
  S10	3000	25

• 2. A taxi cab company keeps car batteries as spare part for its fleet of aging taxis. It purchases batteries at $14 each and it costs $11 to place an order. The company uses about 12,000 batteries each year at a uniform rate. The company operates 5 days a week for 52 weeks per year with the exception of six national holidays a year. The order lead time is 4 days. The holding cost is 24 % of the item cost per year. Determine the EOQ and the reorder level. What is the total inventorying and ordering cost associated with the EOQ?

• 3. Resolve the example given for graphical approach but with a improved service level of 95 %. Compare your results with the one in example.

• 4. Solve Problem 3 using analytical method. How many components are needed each year for an average running time between failures of 1011 h with 95 % confidence ($\phi = 1. 6 5$ for 95 % confidence).