An efficient model formulation for level of repair analysis

Given a product design and a repair network, a level of repair analysis (LORA) determines for each component in the product (1) whether it should be discarded or repaired upon failure and (2) at which echelon in the repair network to do this. The objective of the LORA is to minimize the total (variable and fixed) costs. We propose an IP model that generalizes the existing models, based on cases that we have seen in practice. Analysis of our model reveals that the integrality constraints on a large number of binary variables can be relaxed without yielding a fractional solution. As a result, we are able to solve problem instances of a realistic size in a couple of seconds on average. Furthermore, we suggest some improvements to the LORA analysis in the current literature.