Joint optimization of spare parts ordering and age-based preventive replacement

In this paper, an integrated model for the joint optimisation of preventive replacement time and spare parts ordering policy is proposed for systems with more than one identical items that operate in parallel. The operating items are preventively replaced under an item-specific age-based preventive replacement policy, while the inventory of spare parts is continuously monitored and replenished under an (s, S) continuous review policy, combined with emergency orders in case of shortages during lead time. The optimal cost of the proposed model is compared against the one of sequential optimisation, where the preventive replacement time is first selected using a traditional age-based preventive replacement model and the inventory control parameters are then optimised for the resulting value of the preventive replacement time. The numerical analysis shows that, unless a preventive replacement is not economically advisable, the proposed model significantly outperforms sequential optimisation. In addition, the proposed model is also compared against the case where the system inter-replacement times are assumed to follow the exponential distribution. The numerical analysis shows that such an approximation, although it is satisfactory when the number of items is large, can be very costly when the number of items in the system and/or the order lead time is quite small.