The Classification of Criticality for Spare Parts by Applying the Ratio of Production Lost Cost to Spare Parts Inventory Cost

Abstract

This study is mainly focused on finding the ratio between opportunity cost and spare parts inventory cost. Implicitly, the opportunity cost is represented by cost of production lost or loss in opportunity to make profits from reducing in production capacity when machine is in maintenance, while inventory cost is the cost of having some parts as spares in inventory system for ensuring these parts will not be shortage. The main aim is to generate the ratio of production lost cost comparing against inventory cost. This ratio is the boundary or demarcation line between the criticality (or not) of spare part, or can be significantly represented as an indication index to be used for classifying the spare parts as critical parts when index is over than one, or non-critical parts when index is less than one. Aims: This study is to find the method for classifying the spare parts which one is the critical part. Or finding the necessity of spares in the machine (or system) when there are any breakdowns. Study Design: To collect the data that is the relevant costs during maintenance downtime from the machine (baggage handling system system), and then exploit these as input data to find the ratio using as a criterion for the decision. Place and Duration of Study: The Baggage Handling System of Suvarnabhumi International Airport (Bangkok Airport), Thailand. The duration of this study is 3 years. Methodology: To find the ratio (or index) by comparison between the production lost cost and spare parts inventory cost. Results: If index or ratio of production lost cost to inventory cost is over than one, then part is criticality. Otherwise, if index is less than one, then part is non-criticality. Conclusion: This ratio can be significantly used as the reference index to classify the spare parts which one is critical part or not.