Production & Operation Management

1. CHAPTER 14: MAINTENANCE MANAGEMENT – II
Responses to Questions
1. Spare parts are ‘independent demand’ items deriving their demand from
the failure characteristics of the components. Statistics of failure is of
much importance in the management of spare parts.
Whereas, most of regular production items are ‘dependent demand’ items.
Their demand is ultimately derived from customer needs.
Thus, the source of demand and the nature of the source are different for
the spares as against the production items.
2. Poisson distribution is valid when the cause of the failure of the
components is external to them.
3. The number of spares required would depend upon whether it is going to
be total breakdown replacement or partly a preventive replacement – and
if preventive, what is the preventive replacement type and frequency.
4. Answer is in the text.
5. Yes, I would buy the Insurance spare – in order to avoid major delay due
to breakdown later.
I would look at the data for similar spares / components on other older
equipment and get failure statistics. These statistics could be used for the
stocking policy of the capital spares.
6. λ = 12 items per month Cs = 500 per item
S = 50 Cc = 25 per cent
Lead Time LT = 2 months.
We compute the service level.
Service level = (Cs - S) / Cs = (500 – 50) / 500 = 0.90
The lead time is 2 months. The mean demand over the lead time is: 12 x 2
= 24 items.
Referring to Poisson distribution table, corresponding to λ of 24 and area
underneath the curve of 0.90, the value of x is 30.
Thus we need to maintain a buffer stock of = (30 - 24) = 6 items.

2. 2
CHAPTER 14: Maintenance Management – II
Objective Questions
1. The following class of spares would have the highest service level:
a. AV
b. AD
c. CD
√d. CV
2. The following class of spares would have the lowest service level:
a. AV
√ b. AD
c. CD
d. CV
3. Kodak and Brisch are:
a. systems of classification of spares
√b. systems of codification of spares
c. companies that have almost eliminated the need for spares
d. methods to compute the number of rotable spares
4. Cost of lack of a spare when needed is:
√a. downtime cost of the equipment
b. equal to cost of ordering the spare
c. equal to the cost of overstock of one unit
d. none of the above
5. Capital spares are required:
a. as reconditionable spares
b. for frequent breakdown maintenance
c. for group replacement
√d. none of the above.
6. Insurance spare is kept when:
a. reliability of the component is low
b. reliability of the component is very high
c. the equipment is insured
√ d. none of the above.
7. Queuing theory is helpful in:
a. computing the number of maintenance personnel required
b. computing the number of ‘rotable’ spares required
√c. a and b
d. none of the above

3. 3
8. In computing the requirement of maintenance spares one may use:
a. Normal distribution
√ b. Normal or Poisson distribution
c. Hyper-exponential distribution
d. None of the above.
9. If an insurance spare costs Rs. 1 lakh and the reliability is estimated to be
0.999, we should buy the spare along with the equipment only if the down-
time costs due to non-availability of the spare are estimated to be:
a. less than or equal to Rs. 10 crore
b. less than or equal to Rs. 1 crore
√ c. more than or equal to Rs. 10 crore
d. more than or equal to Rs. 1 crore
10.System reliabilities are the lowest, when redundancies are provided at the
level of the:
√ a. equipment
b. module
c. component/part
d. none of the above