Optimizing the Level of Slow Moving Aviation Spare Parts Inventory with Economic Order Quantity Model Using Bootstrap Method

It is of no secret that today being lean with stocks is a must if a company wants to compete successfully on the market. That is why lot of attention is paid to the inventory level, its value, order quantity and batch sizes. Economical Order Quantity (EOQ) is a tool that is widely used to find solutions to the inventory size and planning problem and works efficiently first of all for fast moving items and under condition that all the parameters of set up costs, holding costs, shortage costs and demand quantity are stable and don't change over the time. In real life companies rarely have ideal situation and have fluctuations in demand especially when it comes up to intermittent demand. For example, in aircraft maintenance organization inventory consists of 20% of fast moving items, 20% of middle moving items and the rest 60% stand for slow moving items. In terms of money assessment these slow moving parts equal to 45% of total stock value. Basic EOQ approach with deterministic demand is not robust to solve the problem with inventory management. This work proposes a solution for slow moving inventory control problem and contains a combination of Stochastic EOQ approach and Bootstrap demand assessment. This approach showed good results and proved to be successful.