Efficient aircraft spare parts inventory management under demand uncertainty

In airline industries, the aircraft maintenance cost takes up about 13% of the total operating cost. It can be reduced by a good planning. Spare parts inventories exist to serve the maintenance planning. Compared with commonly used reorder point system (ROP) and forecasting methods which only consider historical data, this paper presents two non-linear programming models which predict impending demands based on installed parts failure distribution. The optimal order time and order quantity can be found by minimizing total cost. The first basic mathematical model assumes shortage period starts from mean time to failure (MTTF). An iteration method and GAMS are used to solve this model. The second improved mathematical model takes into account accurate shortage time. Due to its complexity, only GAMS is applied in solution methodology. Both models can be proved effective in cost reduction through revised numerical examples and their results. Comparisons of the two models are also discussed.