Optimal system supply

This paper unifies and extends previous work by Guy Black and Frank Proschan which shows how to calculate minimum‐cost spare‐part kits yielding specified assurance against shutdown due to shortage in a complex military system. Optimal policies are determined for both the situation in which only the initial spare‐parts kit may be used to replace failed components (single‐period model) and the situation in which periodic replenishment of the spare‐part kit occurs (multiperiod model). In the multiperiod model, constant lag in delivery is permitted. The only input data required are component costs and failure distributions (assumed exponential in the multiperiod model); knowledge of component usage rates is not required. Actual applications of the single‐period model to certain large military systems are described briefly.