Simulation of a closed loop multi-echelon repairable inventory system

Repairable inventory is an important research field of improving operational readiness and reducing LCC (life cycle cost) for equipments. In spite of the sophisticated models and techniques were developed to manage the spares parts inventory in a multi-echelon system successfully, some restrictions still exist on its application to real case problems. To surpass some of these limitations a simulation model is developed in this paper. This thesis uses a discrete-event stochastic simulation model with Arena to establish a closed loop multi-echelon repairable inventory model, which can show the flow of demand information entities and parts entities moving between base and depot. Several examples are given to verify the model, discuss the effect of depot repair capacity on EBO (expect backorder) and optimize spares location. The results show that the proposed model is more accurate and efficient than METRIC (multi-echelon technique for recoverable item control) model.