Patent ID: 7647255

Claim:
A method of optimizing rotable inventory, comprising: interfacing a processor with a user interface, the user interface and the processor communicating with a computer having a computer readable storage medium including instructions for executing an algorithm to determine an optimized inventory level, the algorithm comprising the steps of: selecting a desired customer service level; obtaining at least one characteristic of a part repair lead-time distribution, wherein the at least one characteristic is a mean μ and a variance σ of the part repair lead-time distribution; computing on the computer a proposed inventory level based on said at least one characteristic, wherein computing a proposed inventory level includes recomputing a probability term β having a distribution reflected by a difference term Δ β and calculating the proposed inventory level as I=A·(R−W)−μ+Δ β ·σ, wherein I is the proposed inventory level, A is a part arrival value, R is a maximum repair time and W is a desired turnaround time window; determining a calculated customer service level corresponding to the proposed inventory level; comparing the calculated customer service level with the desired customer service level; and selecting the proposed inventory level as the optimized inventory level when the calculated customer service level is within a selected convergence threshold with respect to the desired customer service level.