Spare Parts Cost Management for Long-Term Economic Sustainability: Using Fuzzy Activity Based LCC

The concept of life cycle sustainability assessment provides an interdisciplinary space to discuss the main challenges in addressing sustainability from a long-term perspective. However, uncertainty related to cost parameters constitutes one of the main challenges in LCC. This uncertainty prevents m...

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Bibliographic Details
Published in:Sustainability 2019-04, Vol.11 (7), p.1835
Main Authors: Durán, Orlando, Afonso, Paulo, Durán, Paulo
Format: Article
Language:English
Subjects:
Activity based costing
Aircraft
Aviation
Cost analysis
Cost assessments
Decision making
Economic analysis
Energy industry
Fuzzy sets
Inventory
Inventory control
Investments
Logistics
Maintenance costs
Mathematical models
Matrix methods
Operating costs
Quotients
Simulation
Spare parts
Sustainability
Uncertainty
Wind power
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Summary:The concept of life cycle sustainability assessment provides an interdisciplinary space to discuss the main challenges in addressing sustainability from a long-term perspective. However, uncertainty related to cost parameters constitutes one of the main challenges in LCC. This uncertainty prevents managers from precisely anticipating the exact values of important variables. These variables include the costs of spare parts inventories, which in some cases can constitute high percentages of the total cost of a product or service. We propose an activity-based costing model that handles uncertainty using triangular numbers, along with a matrix representation, and Weibull functions to incorporate the projected equipment reliability into the model. A case study based on a spare parts distribution center, which serves the mining industry in Northern Chile, is presented. The results obtained are compared with a traditional costing method. The advantage of using the proposed approach over the traditional one is evident. Future research is directed towards the implementation of a larger number of inventory policies, along with experimentation with other types of fuzzy numbers.
ISSN:2071-1050
2071-1050
DOI:10.3390/su11071835