A Real Options Approach to Quantity and Cost Optimization for Lifetime and Bridge Buys of Parts
MARYLAND UNIV COLLEGE PARK CENTER FOR ADVANCED LIFE CYCLE ENGINEERING (CALCE)
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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.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies