A Real Options Approach to Quantity and Cost Optimization for Lifetime and Bridge Buys of Parts

Abstract

When a part becomes obsolete, lifetime buy is a mitigation approach that involves the purchase and storage of a part in a sufficient quantity to meet current and (expected) future demands. The opportunity to make lifetime buys is usually offered by manufacturers prior to part discontinuance. Lifetime buys play a role in nearly every part obsolescence management portfolio. Advantages of Lifetime Buys: Design modifications and re-qualification is not required. Original warranty on parts from the manufacturer is available. Management often views lifetime buys as a straightforward option.

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Document Details

Document Type
Technical Report
Publication Date
May 01, 2015
Accession Number
ADA625159

Entities

People

  • Navid Gourdarzi
  • Peter Sandborn

Organizations

  • University of Maryland

Tags

Communities of Interest

  • Air Platforms

DTIC Thesaurus Topics

  • Acquisition
  • Contracts
  • Cost Analysis
  • Costs
  • Delphi Method
  • Dynamic Programming
  • Electronic Components
  • Engineering
  • Inventory
  • Life Cycles
  • Mechanical Engineering
  • Obsolescence
  • Operations Management
  • Operations Research
  • Optimization
  • Uncertainty
  • Universities

Readers

  • Chemistry (specifically Chemical Fluorescence)
  • Industrial Economics
  • Systems Analysis and Design