research article a cost model for integrated logistic support...
TRANSCRIPT
Hindawi Publishing CorporationAdvances in Operations ResearchVolume 2013 Article ID 127497 6 pageshttpdxdoiorg1011552013127497
Research ArticleA Cost Model for Integrated Logistic Support Activities
M Elena Nenni
Department of Industrial Engineering University of Naples Federico II Piazzale Tecchio 80 80125 Naples Italy
Correspondence should be addressed to M Elena Nenni menenniuninait
Received 27 September 2012 Accepted 13 December 2012
Academic Editor Shey-Huei Sheu
Copyright copy 2013 M Elena Nenni This is an open access article distributed under the Creative Commons Attribution Licensewhich permits unrestricted use distribution and reproduction in any medium provided the original work is properly cited
An Integrated Logistic Support (ILS) service has the objective of improving a systemrsquos efficiency and availability for the life cycleThe system constructor offers the service to the customer and she becomes the Contractor Logistic Support (CLS) The aim of thispaper is to propose an approach to support the CLS in the budget formulation Specific goals of the model are the provision ofthe annual cost of ILS activities through a specific cost model and a comprehensive examination of expected benefits costs andsavings under alternative ILS strategies A simple example derived from an industrial application is also provided to illustrate theidea Scientific literature is lacking in the topic and documents from the military are just dealing with the issue of performancemeasurement Moreover they are obviously focused on the customerrsquos perspective Other scientific papers are general and focusedonly on maintenance or life cycle management The model developed in this paper approaches the problem from the perspectiveof the CLS and it is specifically tailored on the main issues of an ILS service
1 Introduction
A specific type of after-sale contract is expanding beyondthe boundaries of military where it was initially introducedIt offers the customer an Integrated Logistic Support (ILS)service [1] to improve systemrsquos efficiency and availabilityfor the life cycle The Contractor Logistic Support (CLS)core business is the design construction and installation ofcomplex hi-tech systems which are produced in a limitednumber and usually require a long time to market Basicallya customer enters into partnership with the CLS becauseits specific and sometimes exclusive skills for the systemrsquoslife cycle management The CLS commits itself for a veryprotracted period frequently for the entire systemrsquos life cycleto guarantee the performance at the service level It requiresthe elaboration of a management framework in order tooptimize costs and achieve the CLSrsquos business objectives
In this context the aim of this paper is to provide anapproach to support the CLS management in the budgetphase for ILS activitiesThe approach should be used to run acomprehensive examination of expected benefits costs andsavings under alternative ILS strategies The main feature of
the proposed model is to explore the problem of the life cyclemanagement for the CLS
The paper begins with a short literature review in orderto point out as in the ILS context only the developmentof specific cost figures that has been addressed up to nowMoreover papers deal only with the perspective of thecustomer Section 3 is devoted to delineate the proposedapproach and in Section 4 we go through the cost model asthe core of our proposal In the last section we present a realindustrial application
2 Literature Review
Decisions support systems should be based on appropriatemodels in order to optimize the overall costs For thispurpose many authors have spent themselves in develop-ing fitting cost models Kaufman [2] has provided a firstoriginal contribution on the structure of life cycle costs ingeneral other authors [3ndash5] have focused more specificallyon costs of operations and support (OampS) phase with theaim to optimize preventive maintenance policies Hatch andBadinelli [6] have instead studied the way of combining two
2 Advances in Operations Research
Table 1 Comparison between LCM and ILS (proposed approach)
Life cycle cost Integrated Logistic SupportPerspective of the customer Perspective of the contractorAddressed early design and production stage Addressed early design and production stageUsed in the acquisition phase Used in the budgeting and operating phaseAim to reduce the total cost of ownership Aim to reduce the total cost of operations and support
Cost of developing producing using and retiring a particular item Cost for preventive and corrective maintenance penalty costand cost for Delay Time
RAManalysis
Technicalparameters
Performanceindicators
Organizationalparameters
ILS cost model
Annual ILS cost
Staffcost
SPcost
Staffcost
SPcost
PM cost
Penalty cost
DT cost
cost cost costDTL DTS DTSp
Figure 1 The proposed approach
conflicting components life cycle cost (LCC) and systemavailability (A) in a single objective function Finally manydocuments from themilitary report on criteria for calculatingsystem availability and main cost categories that should beconsidered [7]
It is easy to note that all the contributions partiallyaddress the issue of developing an integrated approachto optimize the ILS cost They only deal with some costfigures and most especially are lacking in considering theproblem from the perspective of the CLS actor Insteadour proposal takes into consideration all the costs involvedin ILS It is not really original in all its specific partsbut it develops some original cost figures and combinessome contributions from previous sources together More-over it allows CLS to run some scenarios to comparedifferent performance and strategies At the end of thisshort review we want to present a comparison between theproposed approach and the well-known life cycle manage-ment (LCM) Basically LCM concerns with the balance ofinvestment between acquisition costs and full life cycle coststo maximize the customer utility The main discrepancieswith the approach proposed in this paper are reported inTable 1
3 The Proposed Approach
Before going through the proposed cost model it is necessarydescribe some assumptionsThe first one concerns the area inwhich it runsThe ILS process is usually involved in (i) designand production (DampP) (ii) operation and support (OampS)and (iii) retirement and disposal (RampD) but theOampS phase isthe longest and can be themost costly [8 9]That is the reasonfor whichOampS issues should be addressed in early stages andit is particularly interesting for CLS The specific goal of thepaper is thus the provisioning of annual cost of ILS activitiesfor the OampS phase
The second assumption is that we study the cost model atthe level of the whole system under the ILS contract (radarship airplane etc) We even consider as already carriedout the RAM analysis [10] to provide the main technicalparameters for the cost model
In Figure 1 the proposed approach is completelydescribed
(1) Data input is technical parameters from the RAManalysis and organizational parameters
(2) The preprocessing step calculates performance indi-cators on the base of data input
Advances in Operations Research 3
Table 2 Main technical parameters for the cost model from theRAM analysis
Parameters DescriptionMTBF Mean time between failuresMTTRS Mean time to restore the systemMTBP Mean time between preventive maintenanceMTTP Mean time to preventive
Table 3 ILS performance indicators
Indicators DescriptionMTBM Mean time between maintenanceMDT Mean down time119860119900
Operational availability
Table 4 Penalty cost for poor performance
Indicators Target Penalty cost (119862119875)
MTBMle MTBM1 119875MTBM
MTBMge MTBM2 1198751015840
MTBMMDTge MDTT 119875MDT
119860119900le 119860
119879119875119860
119860119900le 119909
1sdot 119886119860119879
1198751015840
119860
119860119900le 119909
2sdot 119886119860119879
11987510158401015840
119860
(3) The core of the approach is the cost model thatcalculates the annual ILS cost depending on theperformance level
(4) The last step lets a trade-off between the performanceand the ILS cost or provides an analysis of the ofdifferent ILS strategies on both cost and performance
4 The Cost Model
Letrsquos go through the core of the approach analyzing the costmodel We present firstly the data input and then all the costfigures
41 The Data Input and the Performance Evaluation In orderto develop a fitting cost model we have initially coped withthe problem of individuating the main parameters of themodel that is reported in Table 2
Additional parameters are then related to the organiza-tional issues Basically we take into consideration a skill factor(SF ge 1) decreasing down to the asymptotic value of 1 asexperience training and expertise possessed by the ILS staffgrows The SF affects on the time to restore the system TheDelay Time is introduced for analyzing specifically the reasonbecause an activity could be delayed It is split up in LogisticDelay Time (DTL) in Staff Delay Time (DTS) and in SpareParts Delay Time (DTSp)
Finally the ILS performance is evaluated through indica-tors in Table 3
According to themain reference [10] we include formulasfor ILS indicators as follow
MTBM = 1
(1MTBF) + (1MTBP)
MDT
=
(SF sdotMTTRS + (DTL + DTS + DTSp)) MTBF(1MTBF) + (1MTBP)
+MTTPMTBP
(1MTBF) + (1MTBP)
119860119900=
MTBMMTBM +MDT
(1)
42 The Cost Figures Now we go through the cost modelthrough the investigation of the cost figure that is split up incost for preventive maintenance (PM) and cost for correctivemaintenance (CM)
The PM and CM costs are both affected mainly by staffand spare parts (SP) costs Concerning the staff cost itis closely related to the time to perform the maintenanceactivity MTTP or MTTRS As result the annual cost forpreventive maintenance is
119862PM = ((119888Sh sdot 119899 sdotMTTP) + 119888SP) sdotOT
MTBP (2)
where 119888Sh is the average hourly cost for an employee 119899 isthe number of persons in staff 119888SP is the average cost forspare parts and material and the Operating Time (OT) is theperiod when a system is working
Analogously the annual cost for corrective maintenanceis
119862CM = 119896 sdot ((119888Sh sdot 119899 sdotMTTRS) + 119888SP) sdotOT
MTBF (3)
where 119896 gt 1 increases the cost to take into account severalcomplications that often occur with a breakdown
An additional cost category in the model is related tothe penalty cost for poor performance (CP) that is basedon the ILS indicators and calculated as shown in Table 4The introduction of a penalty cost allows us to consider thetrade-off between costs and performance in accordance withrecommendations by Hatch and Badinelli [6]
The MTBM should be in an optimal range [MTBM1
MTBM2] to avoid the system stops too frequently and a poor
use of preventive maintenance too The MDT exceeding itstarget reveals a problem of maintainability Finally penaltycost related to 119860
119900is a continuous function at times as in
Table 4 where 1199092gt 1199091and both are lt1 and 11987510158401015840
119860gt 1198751015840
119860
The last cost figure in themodel concerns theDelay TimeWe do not consider that cost is incurred directly because anactivity is delayed In fact it is just in penalty cost throughthe MDT indicator But we have developed ad hoc a costfigure that links Delay Times to the investment in theirimprovement or to maintain them constant as follow
119862DT = 120574 sdot ln(DT0
DT) (4)
4 Advances in Operations Research
0 40 80 120 160 200 240 280 320 01 06 11 16 21 26
0 40 80 120 160 200 240 280 320 360 400 440 0 40 80 120 160 200 240 280 320 360 400 440 480
CILS under varying MTTRS
CILS under varying MTTRSCILS under varying MTTRS
CILS under varying MTTRS
C10C9
C8C7
C6C5C4C3C2
C1C0
times105
C40
C35
C30
C25
C20
C15
C10
C5
C0
times104
C30
C25
C20
C15
C10
C5
C0
times104
C35
C63
C625
C62
C615
C61
C605
times102
Figure 2 119862ILS under the variation of MTBF MTTRS MTBP and MTTP
1 15 2 25 3 35 4 45 5C5
C6
C7CILS under varying SFtimes10
4
Figure 3 119862ILS under the variation of SF
Considering that the cost for performing an activitydecreases monotonously while duration grows CDT is alogarithm function as in (4) where DT0 could be estimatedas a value of DT at the beginning of the year if there is
no further investment DT is the expected value for thecurrent year and 120574 is a constant calculated on the basis ofa relationship between investment and DT that could beknownThat is if the investment to halve DT (119888
05) is known
then
120574 =11988805
ln 2 (5)
Now the annual cost function (119862ILS) can be formulated inthe following way
119862ILS = 119862PM + 119862CM + 119862119875 + 119862DTL+ 119862DTS+ 119862DTSp (6)
5 Industry Application
The idea in this paper was developed in a research centerlocated in an area of Italy richly populated by companiesproviding the military with complex systems as radars ormissiles in which the importance of the ILS is growingdaily In Table 5 we report just a short example of the cost
Advances in Operations Research 5
times104
01 05 09 13 17 21 25 29 33 37 41
C62
C625
C63
C635
C645
01 05 09 13 17 21 25 29 33 37 41 01 05 09 13 17 21 25 29 33 37 41
CILS under varying DTL CILS under varying DTs
CILS under varying DTSp
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
Figure 4 119862ILS under the variation of DTs
model application in this industry It was built by extractinga minimum set of data from a real plan of ILS activi-ties for supporting radars provided by a CLS to the airforce of a country in the Mediterranean area In the basicscenario the CLS can calculate the CILS as C61708 thatrepresents a very comprehensive evaluation of the annualcost for ILS activities including the original cost item CDTand combining the trade-off between costs and systemavailability
The CLS is now supported during the negotiating andbudgeting phases as well as during the whole systemrsquos lifecycle through a most useful cost optimization In fact theCLS is typically the designer and constructor of the hi-techsystem and he manages all the technical and organizationalparameters By changing them CLS can analyze different ILSscenarios and have an instant reply to the way in which aparameter affects the annual ILS cost In Figure 2 we reportthe 119862ILS under the variation of MTBF MTTRS MTBPand MTTP Trends suggest that investments for increasingMTBF over 100 hours are probably not justified by thesaving on the 119862ILS that holds almost steady The same
happens for MTBP over 200 hours Insteading increas-ing MTTRS and MTTP means increases linearly even the119862ILS
Figure 3 shows an invariance of 119862ILS from the skill factorFinally in Figure 4 we can see that under varying DelayTimes the trend of119862ILS becomes constant after a few Insteaddecreasing the DT values involves an investment cost But itis interesting that cost grows very slowly and for Delay Timespoint of view 119862ILS increases of about just C3000 or C4000It obviously depends on the 119888
05that is quite low
6 Concluding Remarks
The annual cost function (119862ILS) just formulated meets all theproposed requirements Indeed it provides annual cost of ILSactivities for the OampS phase Moreover the introduction ofspecific cost categories as penalty cost and cost for DelayTime addresses the requirement of approaching the problemfrom the pers of the CLS Finally the cost model supportsCLS for decisions in the budget phase and better for assessingthe effectiveness of planning under alternative ILS strategies
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
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2 Advances in Operations Research
Table 1 Comparison between LCM and ILS (proposed approach)
Life cycle cost Integrated Logistic SupportPerspective of the customer Perspective of the contractorAddressed early design and production stage Addressed early design and production stageUsed in the acquisition phase Used in the budgeting and operating phaseAim to reduce the total cost of ownership Aim to reduce the total cost of operations and support
Cost of developing producing using and retiring a particular item Cost for preventive and corrective maintenance penalty costand cost for Delay Time
RAManalysis
Technicalparameters
Performanceindicators
Organizationalparameters
ILS cost model
Annual ILS cost
Staffcost
SPcost
Staffcost
SPcost
PM cost
Penalty cost
DT cost
cost cost costDTL DTS DTSp
Figure 1 The proposed approach
conflicting components life cycle cost (LCC) and systemavailability (A) in a single objective function Finally manydocuments from themilitary report on criteria for calculatingsystem availability and main cost categories that should beconsidered [7]
It is easy to note that all the contributions partiallyaddress the issue of developing an integrated approachto optimize the ILS cost They only deal with some costfigures and most especially are lacking in considering theproblem from the perspective of the CLS actor Insteadour proposal takes into consideration all the costs involvedin ILS It is not really original in all its specific partsbut it develops some original cost figures and combinessome contributions from previous sources together More-over it allows CLS to run some scenarios to comparedifferent performance and strategies At the end of thisshort review we want to present a comparison between theproposed approach and the well-known life cycle manage-ment (LCM) Basically LCM concerns with the balance ofinvestment between acquisition costs and full life cycle coststo maximize the customer utility The main discrepancieswith the approach proposed in this paper are reported inTable 1
3 The Proposed Approach
Before going through the proposed cost model it is necessarydescribe some assumptionsThe first one concerns the area inwhich it runsThe ILS process is usually involved in (i) designand production (DampP) (ii) operation and support (OampS)and (iii) retirement and disposal (RampD) but theOampS phase isthe longest and can be themost costly [8 9]That is the reasonfor whichOampS issues should be addressed in early stages andit is particularly interesting for CLS The specific goal of thepaper is thus the provisioning of annual cost of ILS activitiesfor the OampS phase
The second assumption is that we study the cost model atthe level of the whole system under the ILS contract (radarship airplane etc) We even consider as already carriedout the RAM analysis [10] to provide the main technicalparameters for the cost model
In Figure 1 the proposed approach is completelydescribed
(1) Data input is technical parameters from the RAManalysis and organizational parameters
(2) The preprocessing step calculates performance indi-cators on the base of data input
Advances in Operations Research 3
Table 2 Main technical parameters for the cost model from theRAM analysis
Parameters DescriptionMTBF Mean time between failuresMTTRS Mean time to restore the systemMTBP Mean time between preventive maintenanceMTTP Mean time to preventive
Table 3 ILS performance indicators
Indicators DescriptionMTBM Mean time between maintenanceMDT Mean down time119860119900
Operational availability
Table 4 Penalty cost for poor performance
Indicators Target Penalty cost (119862119875)
MTBMle MTBM1 119875MTBM
MTBMge MTBM2 1198751015840
MTBMMDTge MDTT 119875MDT
119860119900le 119860
119879119875119860
119860119900le 119909
1sdot 119886119860119879
1198751015840
119860
119860119900le 119909
2sdot 119886119860119879
11987510158401015840
119860
(3) The core of the approach is the cost model thatcalculates the annual ILS cost depending on theperformance level
(4) The last step lets a trade-off between the performanceand the ILS cost or provides an analysis of the ofdifferent ILS strategies on both cost and performance
4 The Cost Model
Letrsquos go through the core of the approach analyzing the costmodel We present firstly the data input and then all the costfigures
41 The Data Input and the Performance Evaluation In orderto develop a fitting cost model we have initially coped withthe problem of individuating the main parameters of themodel that is reported in Table 2
Additional parameters are then related to the organiza-tional issues Basically we take into consideration a skill factor(SF ge 1) decreasing down to the asymptotic value of 1 asexperience training and expertise possessed by the ILS staffgrows The SF affects on the time to restore the system TheDelay Time is introduced for analyzing specifically the reasonbecause an activity could be delayed It is split up in LogisticDelay Time (DTL) in Staff Delay Time (DTS) and in SpareParts Delay Time (DTSp)
Finally the ILS performance is evaluated through indica-tors in Table 3
According to themain reference [10] we include formulasfor ILS indicators as follow
MTBM = 1
(1MTBF) + (1MTBP)
MDT
=
(SF sdotMTTRS + (DTL + DTS + DTSp)) MTBF(1MTBF) + (1MTBP)
+MTTPMTBP
(1MTBF) + (1MTBP)
119860119900=
MTBMMTBM +MDT
(1)
42 The Cost Figures Now we go through the cost modelthrough the investigation of the cost figure that is split up incost for preventive maintenance (PM) and cost for correctivemaintenance (CM)
The PM and CM costs are both affected mainly by staffand spare parts (SP) costs Concerning the staff cost itis closely related to the time to perform the maintenanceactivity MTTP or MTTRS As result the annual cost forpreventive maintenance is
119862PM = ((119888Sh sdot 119899 sdotMTTP) + 119888SP) sdotOT
MTBP (2)
where 119888Sh is the average hourly cost for an employee 119899 isthe number of persons in staff 119888SP is the average cost forspare parts and material and the Operating Time (OT) is theperiod when a system is working
Analogously the annual cost for corrective maintenanceis
119862CM = 119896 sdot ((119888Sh sdot 119899 sdotMTTRS) + 119888SP) sdotOT
MTBF (3)
where 119896 gt 1 increases the cost to take into account severalcomplications that often occur with a breakdown
An additional cost category in the model is related tothe penalty cost for poor performance (CP) that is basedon the ILS indicators and calculated as shown in Table 4The introduction of a penalty cost allows us to consider thetrade-off between costs and performance in accordance withrecommendations by Hatch and Badinelli [6]
The MTBM should be in an optimal range [MTBM1
MTBM2] to avoid the system stops too frequently and a poor
use of preventive maintenance too The MDT exceeding itstarget reveals a problem of maintainability Finally penaltycost related to 119860
119900is a continuous function at times as in
Table 4 where 1199092gt 1199091and both are lt1 and 11987510158401015840
119860gt 1198751015840
119860
The last cost figure in themodel concerns theDelay TimeWe do not consider that cost is incurred directly because anactivity is delayed In fact it is just in penalty cost throughthe MDT indicator But we have developed ad hoc a costfigure that links Delay Times to the investment in theirimprovement or to maintain them constant as follow
119862DT = 120574 sdot ln(DT0
DT) (4)
4 Advances in Operations Research
0 40 80 120 160 200 240 280 320 01 06 11 16 21 26
0 40 80 120 160 200 240 280 320 360 400 440 0 40 80 120 160 200 240 280 320 360 400 440 480
CILS under varying MTTRS
CILS under varying MTTRSCILS under varying MTTRS
CILS under varying MTTRS
C10C9
C8C7
C6C5C4C3C2
C1C0
times105
C40
C35
C30
C25
C20
C15
C10
C5
C0
times104
C30
C25
C20
C15
C10
C5
C0
times104
C35
C63
C625
C62
C615
C61
C605
times102
Figure 2 119862ILS under the variation of MTBF MTTRS MTBP and MTTP
1 15 2 25 3 35 4 45 5C5
C6
C7CILS under varying SFtimes10
4
Figure 3 119862ILS under the variation of SF
Considering that the cost for performing an activitydecreases monotonously while duration grows CDT is alogarithm function as in (4) where DT0 could be estimatedas a value of DT at the beginning of the year if there is
no further investment DT is the expected value for thecurrent year and 120574 is a constant calculated on the basis ofa relationship between investment and DT that could beknownThat is if the investment to halve DT (119888
05) is known
then
120574 =11988805
ln 2 (5)
Now the annual cost function (119862ILS) can be formulated inthe following way
119862ILS = 119862PM + 119862CM + 119862119875 + 119862DTL+ 119862DTS+ 119862DTSp (6)
5 Industry Application
The idea in this paper was developed in a research centerlocated in an area of Italy richly populated by companiesproviding the military with complex systems as radars ormissiles in which the importance of the ILS is growingdaily In Table 5 we report just a short example of the cost
Advances in Operations Research 5
times104
01 05 09 13 17 21 25 29 33 37 41
C62
C625
C63
C635
C645
01 05 09 13 17 21 25 29 33 37 41 01 05 09 13 17 21 25 29 33 37 41
CILS under varying DTL CILS under varying DTs
CILS under varying DTSp
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
Figure 4 119862ILS under the variation of DTs
model application in this industry It was built by extractinga minimum set of data from a real plan of ILS activi-ties for supporting radars provided by a CLS to the airforce of a country in the Mediterranean area In the basicscenario the CLS can calculate the CILS as C61708 thatrepresents a very comprehensive evaluation of the annualcost for ILS activities including the original cost item CDTand combining the trade-off between costs and systemavailability
The CLS is now supported during the negotiating andbudgeting phases as well as during the whole systemrsquos lifecycle through a most useful cost optimization In fact theCLS is typically the designer and constructor of the hi-techsystem and he manages all the technical and organizationalparameters By changing them CLS can analyze different ILSscenarios and have an instant reply to the way in which aparameter affects the annual ILS cost In Figure 2 we reportthe 119862ILS under the variation of MTBF MTTRS MTBPand MTTP Trends suggest that investments for increasingMTBF over 100 hours are probably not justified by thesaving on the 119862ILS that holds almost steady The same
happens for MTBP over 200 hours Insteading increas-ing MTTRS and MTTP means increases linearly even the119862ILS
Figure 3 shows an invariance of 119862ILS from the skill factorFinally in Figure 4 we can see that under varying DelayTimes the trend of119862ILS becomes constant after a few Insteaddecreasing the DT values involves an investment cost But itis interesting that cost grows very slowly and for Delay Timespoint of view 119862ILS increases of about just C3000 or C4000It obviously depends on the 119888
05that is quite low
6 Concluding Remarks
The annual cost function (119862ILS) just formulated meets all theproposed requirements Indeed it provides annual cost of ILSactivities for the OampS phase Moreover the introduction ofspecific cost categories as penalty cost and cost for DelayTime addresses the requirement of approaching the problemfrom the pers of the CLS Finally the cost model supportsCLS for decisions in the budget phase and better for assessingthe effectiveness of planning under alternative ILS strategies
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Advances in Operations Research 3
Table 2 Main technical parameters for the cost model from theRAM analysis
Parameters DescriptionMTBF Mean time between failuresMTTRS Mean time to restore the systemMTBP Mean time between preventive maintenanceMTTP Mean time to preventive
Table 3 ILS performance indicators
Indicators DescriptionMTBM Mean time between maintenanceMDT Mean down time119860119900
Operational availability
Table 4 Penalty cost for poor performance
Indicators Target Penalty cost (119862119875)
MTBMle MTBM1 119875MTBM
MTBMge MTBM2 1198751015840
MTBMMDTge MDTT 119875MDT
119860119900le 119860
119879119875119860
119860119900le 119909
1sdot 119886119860119879
1198751015840
119860
119860119900le 119909
2sdot 119886119860119879
11987510158401015840
119860
(3) The core of the approach is the cost model thatcalculates the annual ILS cost depending on theperformance level
(4) The last step lets a trade-off between the performanceand the ILS cost or provides an analysis of the ofdifferent ILS strategies on both cost and performance
4 The Cost Model
Letrsquos go through the core of the approach analyzing the costmodel We present firstly the data input and then all the costfigures
41 The Data Input and the Performance Evaluation In orderto develop a fitting cost model we have initially coped withthe problem of individuating the main parameters of themodel that is reported in Table 2
Additional parameters are then related to the organiza-tional issues Basically we take into consideration a skill factor(SF ge 1) decreasing down to the asymptotic value of 1 asexperience training and expertise possessed by the ILS staffgrows The SF affects on the time to restore the system TheDelay Time is introduced for analyzing specifically the reasonbecause an activity could be delayed It is split up in LogisticDelay Time (DTL) in Staff Delay Time (DTS) and in SpareParts Delay Time (DTSp)
Finally the ILS performance is evaluated through indica-tors in Table 3
According to themain reference [10] we include formulasfor ILS indicators as follow
MTBM = 1
(1MTBF) + (1MTBP)
MDT
=
(SF sdotMTTRS + (DTL + DTS + DTSp)) MTBF(1MTBF) + (1MTBP)
+MTTPMTBP
(1MTBF) + (1MTBP)
119860119900=
MTBMMTBM +MDT
(1)
42 The Cost Figures Now we go through the cost modelthrough the investigation of the cost figure that is split up incost for preventive maintenance (PM) and cost for correctivemaintenance (CM)
The PM and CM costs are both affected mainly by staffand spare parts (SP) costs Concerning the staff cost itis closely related to the time to perform the maintenanceactivity MTTP or MTTRS As result the annual cost forpreventive maintenance is
119862PM = ((119888Sh sdot 119899 sdotMTTP) + 119888SP) sdotOT
MTBP (2)
where 119888Sh is the average hourly cost for an employee 119899 isthe number of persons in staff 119888SP is the average cost forspare parts and material and the Operating Time (OT) is theperiod when a system is working
Analogously the annual cost for corrective maintenanceis
119862CM = 119896 sdot ((119888Sh sdot 119899 sdotMTTRS) + 119888SP) sdotOT
MTBF (3)
where 119896 gt 1 increases the cost to take into account severalcomplications that often occur with a breakdown
An additional cost category in the model is related tothe penalty cost for poor performance (CP) that is basedon the ILS indicators and calculated as shown in Table 4The introduction of a penalty cost allows us to consider thetrade-off between costs and performance in accordance withrecommendations by Hatch and Badinelli [6]
The MTBM should be in an optimal range [MTBM1
MTBM2] to avoid the system stops too frequently and a poor
use of preventive maintenance too The MDT exceeding itstarget reveals a problem of maintainability Finally penaltycost related to 119860
119900is a continuous function at times as in
Table 4 where 1199092gt 1199091and both are lt1 and 11987510158401015840
119860gt 1198751015840
119860
The last cost figure in themodel concerns theDelay TimeWe do not consider that cost is incurred directly because anactivity is delayed In fact it is just in penalty cost throughthe MDT indicator But we have developed ad hoc a costfigure that links Delay Times to the investment in theirimprovement or to maintain them constant as follow
119862DT = 120574 sdot ln(DT0
DT) (4)
4 Advances in Operations Research
0 40 80 120 160 200 240 280 320 01 06 11 16 21 26
0 40 80 120 160 200 240 280 320 360 400 440 0 40 80 120 160 200 240 280 320 360 400 440 480
CILS under varying MTTRS
CILS under varying MTTRSCILS under varying MTTRS
CILS under varying MTTRS
C10C9
C8C7
C6C5C4C3C2
C1C0
times105
C40
C35
C30
C25
C20
C15
C10
C5
C0
times104
C30
C25
C20
C15
C10
C5
C0
times104
C35
C63
C625
C62
C615
C61
C605
times102
Figure 2 119862ILS under the variation of MTBF MTTRS MTBP and MTTP
1 15 2 25 3 35 4 45 5C5
C6
C7CILS under varying SFtimes10
4
Figure 3 119862ILS under the variation of SF
Considering that the cost for performing an activitydecreases monotonously while duration grows CDT is alogarithm function as in (4) where DT0 could be estimatedas a value of DT at the beginning of the year if there is
no further investment DT is the expected value for thecurrent year and 120574 is a constant calculated on the basis ofa relationship between investment and DT that could beknownThat is if the investment to halve DT (119888
05) is known
then
120574 =11988805
ln 2 (5)
Now the annual cost function (119862ILS) can be formulated inthe following way
119862ILS = 119862PM + 119862CM + 119862119875 + 119862DTL+ 119862DTS+ 119862DTSp (6)
5 Industry Application
The idea in this paper was developed in a research centerlocated in an area of Italy richly populated by companiesproviding the military with complex systems as radars ormissiles in which the importance of the ILS is growingdaily In Table 5 we report just a short example of the cost
Advances in Operations Research 5
times104
01 05 09 13 17 21 25 29 33 37 41
C62
C625
C63
C635
C645
01 05 09 13 17 21 25 29 33 37 41 01 05 09 13 17 21 25 29 33 37 41
CILS under varying DTL CILS under varying DTs
CILS under varying DTSp
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
Figure 4 119862ILS under the variation of DTs
model application in this industry It was built by extractinga minimum set of data from a real plan of ILS activi-ties for supporting radars provided by a CLS to the airforce of a country in the Mediterranean area In the basicscenario the CLS can calculate the CILS as C61708 thatrepresents a very comprehensive evaluation of the annualcost for ILS activities including the original cost item CDTand combining the trade-off between costs and systemavailability
The CLS is now supported during the negotiating andbudgeting phases as well as during the whole systemrsquos lifecycle through a most useful cost optimization In fact theCLS is typically the designer and constructor of the hi-techsystem and he manages all the technical and organizationalparameters By changing them CLS can analyze different ILSscenarios and have an instant reply to the way in which aparameter affects the annual ILS cost In Figure 2 we reportthe 119862ILS under the variation of MTBF MTTRS MTBPand MTTP Trends suggest that investments for increasingMTBF over 100 hours are probably not justified by thesaving on the 119862ILS that holds almost steady The same
happens for MTBP over 200 hours Insteading increas-ing MTTRS and MTTP means increases linearly even the119862ILS
Figure 3 shows an invariance of 119862ILS from the skill factorFinally in Figure 4 we can see that under varying DelayTimes the trend of119862ILS becomes constant after a few Insteaddecreasing the DT values involves an investment cost But itis interesting that cost grows very slowly and for Delay Timespoint of view 119862ILS increases of about just C3000 or C4000It obviously depends on the 119888
05that is quite low
6 Concluding Remarks
The annual cost function (119862ILS) just formulated meets all theproposed requirements Indeed it provides annual cost of ILSactivities for the OampS phase Moreover the introduction ofspecific cost categories as penalty cost and cost for DelayTime addresses the requirement of approaching the problemfrom the pers of the CLS Finally the cost model supportsCLS for decisions in the budget phase and better for assessingthe effectiveness of planning under alternative ILS strategies
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
4 Advances in Operations Research
0 40 80 120 160 200 240 280 320 01 06 11 16 21 26
0 40 80 120 160 200 240 280 320 360 400 440 0 40 80 120 160 200 240 280 320 360 400 440 480
CILS under varying MTTRS
CILS under varying MTTRSCILS under varying MTTRS
CILS under varying MTTRS
C10C9
C8C7
C6C5C4C3C2
C1C0
times105
C40
C35
C30
C25
C20
C15
C10
C5
C0
times104
C30
C25
C20
C15
C10
C5
C0
times104
C35
C63
C625
C62
C615
C61
C605
times102
Figure 2 119862ILS under the variation of MTBF MTTRS MTBP and MTTP
1 15 2 25 3 35 4 45 5C5
C6
C7CILS under varying SFtimes10
4
Figure 3 119862ILS under the variation of SF
Considering that the cost for performing an activitydecreases monotonously while duration grows CDT is alogarithm function as in (4) where DT0 could be estimatedas a value of DT at the beginning of the year if there is
no further investment DT is the expected value for thecurrent year and 120574 is a constant calculated on the basis ofa relationship between investment and DT that could beknownThat is if the investment to halve DT (119888
05) is known
then
120574 =11988805
ln 2 (5)
Now the annual cost function (119862ILS) can be formulated inthe following way
119862ILS = 119862PM + 119862CM + 119862119875 + 119862DTL+ 119862DTS+ 119862DTSp (6)
5 Industry Application
The idea in this paper was developed in a research centerlocated in an area of Italy richly populated by companiesproviding the military with complex systems as radars ormissiles in which the importance of the ILS is growingdaily In Table 5 we report just a short example of the cost
Advances in Operations Research 5
times104
01 05 09 13 17 21 25 29 33 37 41
C62
C625
C63
C635
C645
01 05 09 13 17 21 25 29 33 37 41 01 05 09 13 17 21 25 29 33 37 41
CILS under varying DTL CILS under varying DTs
CILS under varying DTSp
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
Figure 4 119862ILS under the variation of DTs
model application in this industry It was built by extractinga minimum set of data from a real plan of ILS activi-ties for supporting radars provided by a CLS to the airforce of a country in the Mediterranean area In the basicscenario the CLS can calculate the CILS as C61708 thatrepresents a very comprehensive evaluation of the annualcost for ILS activities including the original cost item CDTand combining the trade-off between costs and systemavailability
The CLS is now supported during the negotiating andbudgeting phases as well as during the whole systemrsquos lifecycle through a most useful cost optimization In fact theCLS is typically the designer and constructor of the hi-techsystem and he manages all the technical and organizationalparameters By changing them CLS can analyze different ILSscenarios and have an instant reply to the way in which aparameter affects the annual ILS cost In Figure 2 we reportthe 119862ILS under the variation of MTBF MTTRS MTBPand MTTP Trends suggest that investments for increasingMTBF over 100 hours are probably not justified by thesaving on the 119862ILS that holds almost steady The same
happens for MTBP over 200 hours Insteading increas-ing MTTRS and MTTP means increases linearly even the119862ILS
Figure 3 shows an invariance of 119862ILS from the skill factorFinally in Figure 4 we can see that under varying DelayTimes the trend of119862ILS becomes constant after a few Insteaddecreasing the DT values involves an investment cost But itis interesting that cost grows very slowly and for Delay Timespoint of view 119862ILS increases of about just C3000 or C4000It obviously depends on the 119888
05that is quite low
6 Concluding Remarks
The annual cost function (119862ILS) just formulated meets all theproposed requirements Indeed it provides annual cost of ILSactivities for the OampS phase Moreover the introduction ofspecific cost categories as penalty cost and cost for DelayTime addresses the requirement of approaching the problemfrom the pers of the CLS Finally the cost model supportsCLS for decisions in the budget phase and better for assessingthe effectiveness of planning under alternative ILS strategies
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Advances in Operations Research 5
times104
01 05 09 13 17 21 25 29 33 37 41
C62
C625
C63
C635
C645
01 05 09 13 17 21 25 29 33 37 41 01 05 09 13 17 21 25 29 33 37 41
CILS under varying DTL CILS under varying DTs
CILS under varying DTSp
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
times104
C62
C625
C63
C635
C645
C61
C615
C64
Figure 4 119862ILS under the variation of DTs
model application in this industry It was built by extractinga minimum set of data from a real plan of ILS activi-ties for supporting radars provided by a CLS to the airforce of a country in the Mediterranean area In the basicscenario the CLS can calculate the CILS as C61708 thatrepresents a very comprehensive evaluation of the annualcost for ILS activities including the original cost item CDTand combining the trade-off between costs and systemavailability
The CLS is now supported during the negotiating andbudgeting phases as well as during the whole systemrsquos lifecycle through a most useful cost optimization In fact theCLS is typically the designer and constructor of the hi-techsystem and he manages all the technical and organizationalparameters By changing them CLS can analyze different ILSscenarios and have an instant reply to the way in which aparameter affects the annual ILS cost In Figure 2 we reportthe 119862ILS under the variation of MTBF MTTRS MTBPand MTTP Trends suggest that investments for increasingMTBF over 100 hours are probably not justified by thesaving on the 119862ILS that holds almost steady The same
happens for MTBP over 200 hours Insteading increas-ing MTTRS and MTTP means increases linearly even the119862ILS
Figure 3 shows an invariance of 119862ILS from the skill factorFinally in Figure 4 we can see that under varying DelayTimes the trend of119862ILS becomes constant after a few Insteaddecreasing the DT values involves an investment cost But itis interesting that cost grows very slowly and for Delay Timespoint of view 119862ILS increases of about just C3000 or C4000It obviously depends on the 119888
05that is quite low
6 Concluding Remarks
The annual cost function (119862ILS) just formulated meets all theproposed requirements Indeed it provides annual cost of ILSactivities for the OampS phase Moreover the introduction ofspecific cost categories as penalty cost and cost for DelayTime addresses the requirement of approaching the problemfrom the pers of the CLS Finally the cost model supportsCLS for decisions in the budget phase and better for assessingthe effectiveness of planning under alternative ILS strategies
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
6 Advances in Operations Research
Table 5 Example of the cost modelmdashbasic scenario
Technical parameters Organizational parameters ILS performance indicatorsMTBF 250 SF 12 MTBM 1111MTTRS 1 DTL 05 MDT 291MTBP 200 DTS 07 119860
11990079
MTTP 50 DTSp 06Other data input
119888Sh CU 12 MTBM le 100 CU 10000 DTL0 06119899 5 MTBM ge 200 CU 1000 DTS0 08119888Sp CU 500 MDT ge 25 CU 5000 DTSp0 07OT 2500 119860
119900le 90 CU 5000 119888
05CU 1000
119896 13 119860119900le 75 CU 10000119860119900le 60 CU 15000
Cost for preventive Cost for corrective Penalty cost for poor Cost for delaymaintenance maintenance performance timeCU 43750 CU 7280 CU 10000 CU 678
Annual cost for ILS activities (119862ILS) CU 61708
More generally the cost model has been developed to be usedto approach the CLSrsquos costs optimization and risk manage-mentThe purpose of the author is just to go in depth into thetwo last issues in next research work
References
[1] Department of Defense (DOD)Directive 410035 Developmentof Integrated Logistics Support for Systems and EquipmentsDepartment of Defense Arlington Va USA 1970
[2] R J Kaufman ldquoLife cycle costing a decision-making tool forcapital equipment acquisitionrdquo Cost and Management vol 2pp 21ndash28 1970
[3] CM F Lapa CMNA Pereira andM PDe Barros ldquoAmodelfor preventive maintenance planning by genetic algorithmsbased in cost and reliabilityrdquo Reliability Engineering and SystemSafety vol 91 no 2 pp 233ndash240 2006
[4] D Chen and K S Trivedi ldquoOptimization for condition-basedmaintenance with semi-Markov decision processrdquo ReliabilityEngineering and System Safety vol 90 no 1 pp 25ndash29 2005
[5] K Woohyun A Suneung and J Yang ldquoDetermining theperiodic maintenance interval for guaranteeing the availabilityof a system with a linearly increasing hazard rate industryapplicationrdquo International Journal of Industrial Engineering vol16 no 2 pp 126ndash134 2009
[6] M L Hatch and R D Badinelli ldquoConcurrent optimization indesigning for logistics supportrdquo European Journal of Opera-tional Research vol 115 no 1 pp 77ndash97 1999
[7] Department of Defense (DOD) Guide for Achieving Reliabil-ity Availability and Maintainability Department of DefenseArlington Va USA 2005
[8] J Choi ldquoOampS cost growthrdquo in Proceedings of the 3rd AnnualNavyMarine Corps Cost Analysis Symposium Gray ResearchCenter Quantico Va USA 2009
[9] Y Asiedu and P Gu ldquoProduct life cycle cost analysis state of theart reviewrdquo International Journal of Production Research vol 36no 4 pp 883ndash908 1998
[10] N H Mortensen U Harlou and A Haug ldquoImproving decisionmaking in the early phases of configuration projectsrdquo Interna-tional Journal of Industrial Engineering vol 15 no 2 pp 185ndash194 2008
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of