By: processindustrylab

September 21, 2017 - September 21, 2017

3:30 pm – 4:30 pm

*J.P.C. Driessen MSc*

**Fast Replacement or Low Purchase Prices? An Optimal Definition of Line Replaceable Units**

We study a company that is concerned with the maintenance of systems. A non functioning system generates opportunity costs to the company. Therefore, the company is interested in defining Line Replaceable Units (LRUs). A LRU is a collection of parts that is replaced when a part in the LRU fails. A LRU can decrease the costs for replacements, as faster replacements may be possible. On the other hand, the company purchases new LRUs and typically large LRUs are more expensive to purchase. Thus, the objective is to determine an optimal definition of LRUs such that the total costs are minimized.

We present a model that captures how various parts in a system are connected, and it considers precedence relationships for maintenance that exist between parts; e.g. we need to remove part A before we can remove part B. We prove that our problem is NP-Hard, and we formulate our problem as a Binary Linear Program as well as a set partitioning problem that allows for column generation. We also prove that the optimal solution to the set partitioning formulation with relaxed integrality is integral. Finally, we numerically compare computation times between both formulations and elaborate on managerial insights.

## Event Location

Eindhoven University of Technology