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The purpose of this paper is to describe a mathematical model, called MOD-METRIC, for the control of a multi-item, multi-echelon, multi-indenture inventory-system for recoverable items, that is, items subject to repair when they fail. Discussion is limited to two-echelon multi-item systems in which an item may be demanded at any one of several locations called bases; in turn, these bases receive inventory from a central location called a depot. The objectives of the model are to describe the logistics relationship between an assembly and its subassemblies, and to compute spare stock levels for both echelons for the assembly and subassemblies with explicit consideration of this logistics relationship. In particular, the model is used to determine the base and depot spare stock levels which minimize total expected base backorders for the assembly subject to a system investment constraint. An example is given showing how the model can be used to calculate spare engine and engine module stock levels. MOD-METRIC has been implemented by the Air Force as the method for computing recoverable spare stock levels for the F-15 weapon system.
John A. Muckstadt (1973) studied this question.