Maintenance and Obsolescence

In this chapter, the authors move beyond forecasting methods that are applicable to intermittent demand items in general, to emphasise some issues specifically related to spare parts. Spare parts demand arising from corrective maintenance, after a failure has occurred, is stochastic and requires forecasting. Intermittent demand for spare parts poses a considerable challenge to those responsible for managing inventories. The authors address causal forecasting for spare parts requirements, followed by an examination of some time series methods specifically designed to deal with obsolescence and spare parts characteristics. Causal forecasting can be very helpful in a corrective maintenance context where a plethora of explanatory variables are typically available to help predict demand for spare parts. Obsolescence is a natural issue to consider in a spare parts context and should be distinguished from deterioration and perishability. The development of the Teunter–Syntetos–Babai and hyperbolic exponential smoothing methods reflects an important inventory-related concern, namely that of obsolescence.