Comparison between proactive block replacement with no inventory and separate reactive replacement with inventory
Abstract: To become a successful company today all costs, must be kept to a minimum. To make sure they are companies need to try new methods and policies to get closer to an optimum production. One of the things that need attention is the inventory of spare parts and the replacement of the same. The companies want their machines to have as many active hours as possible and therefore they need to replace components in them from time to time. This study will compare the current policy with a new one to see if it is economically justifiable to minimize the inventory of spare parts. This will be done by replacing two identical components in the same machine before they fail and production stops. We call it the proactive block replacement policy. To test this new policy a simulation based on historical data was made where the costs associated with the different replacements such as cost of component, cost o lost production and cost of the two types of replacements. All these costs were considered to see is the company could save money through this change. The result showed that the new policy was not suitable for this specific component because the cost of the component and the variation of lifetime on it was too high. Because of the big variation of lifetime, the time of the replacement had to be set after fewer hours of production which means more components will be used and the cost per active hour will be higher. This study is limited because only one specific component at a specific machine was studied and it is not possible to make any assumptions for other components from this study. This had to be done to get the most precise information from the company to get the best result. The conclusion of this study is that the company should keep their current replacement theory and not change into the new one. Though there might be possible ways of lowering the costs by only having one component in inventory instead of two.
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