A methodology to determine the cost of spare part for choosing the best mode of shipment

Many companies face the challenge of keeping on stock large inventories of spare parts (SP) & bearing excessive holding & obsolescence costs. Thus, for them, the effective cost analysis can be an important tool to evaluate the effects of stock control decisions related to SP. This paper proposes a methodology for reducing the imposed costs. In order to enable the company to predict the demand level through an experimental algorithm, it presents a case study in the real world for calculating the price of each SP before its purchase. Choosing the optimum mode of shipment for variety of SP to be ordered, is the final intention of this research report.