Simple inventory models are developed for fast moving spare parts subject to the risk of unexpected, immediate obsolescence. The approach does not require a precise knowledge of the probability distribution of the moment of obsolescence, as is the case for models discussed in the literature. A rough estimate of the obsolescence risk for the next order cycle is sufficient. The models can be seen as extensions of the EOQ-formula. Following cases are studied: 1. 1. Constant obsolescence risk; no shortages allowed 2. 2. Varying obsolescence risk; no shortages allowed 3. 3. Varying obsolescence risk; shortages allowed It appears that the models are practicable and, in the proper circumstances, lead to a substantial reduction of cost.
International Journal of Production Economics – Elsevier
Published: Jul 1, 1996
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