Markov-modulated analysis of a spare parts system with priority delivery and changes to order and holding costs

Capital goods often require new parts as their life cycle comes to an end. The fact that suppliers for the spare parts required stop producing them and the long distance from production to repair facility together result in random lead times and disruptions. Shortages are very costly with regard to capital products thus it is important for any company that these are minimised. We analyse this as an inventory system and change certain cost parameters. We follow up by calculating the effects of each change and incorporating them into cost functions found in literature. We find cost deviations of up to 60% as the effects of random lead times and disruptions. The changes in cost parameters each result in a small cost deviation of up to 15%.