Intermittent Demand Forecasting

12Maintenance and Obsolescence

12.1 Introduction

As previously discussed in this book, intermittent demand forecasting is particularly relevant in a maintenance context. In this chapter, we move beyond forecasting methods that are applicable to intermittent demand items in general, to emphasise some issues specifically related to spare parts. Their need arises whenever a component fails and has to be replaced (corrective maintenance) or when a replacement is made to forestall future problems (preventive maintenance).

Spare parts demand arising from corrective maintenance, after a failure has occurred, is stochastic and requires forecasting. Demand arising from preventive maintenance for equipment is scheduled (since we know when such maintenance activities are due) and thus deterministic, at least in principle. However, a qualification is needed here. Although the timing of preventive maintenance activities is known well in advance, the important thing is that the relevant spare parts requirements for the equipment is also communicated in advance to the stockist. When specialist departments within a company perform maintenance activities this will typically be the case. Usually, this would also be true when an external vendor undertakes maintenance tasks on an organisation's behalf, as it is beneficial for both parties for such information to be shared. Although there are exceptions to the rule, it is fair to assume that demand in these situations is deterministic.

So, in summary, ...