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Managing the spare parts in a proper way, which helps companies to maintain a high service level without unnecessary high inventory cost.
Intermittent demand patterns are often characterizing spare parts, having periods of zero demand, with occasional periods with non-zero demands and in addition can be highly variable in quantity size.
Ccompanies must recognize that some spare parts can be outmost critical, and might have stock-out costs that are disproportionally high compared to the value of the item.
Balancing the proper service level is an important aspect in this field. The intermittent demand coupled with the importance of balancing the service level, makes the planning of spare parts very difficult. In our experience, many production companies struggle to manage their spare part inventories sufficiently due to the high complexity, and thus many unnecessary costs are allocated to this area.
