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    Aviation MRO: Demand Forecasting & Inventory Optimization

    RETAIL AND E-COMMERCE

     

    Demand forecasting and inventory optimization through Poisson Distribution, and Linear Programming.

    About the customer

    A reputed Maintenance, Repair, and Overhaul (MRO) organization that had partnered with major airlines for the inspection, repair, overhaul, and modification of their components and systems.

    Business Problem

    The aviation MRO approached ORMAE for help on:

    • Setting up a model for rotatable float computation.
    • Minimizing the total cost for a group of parts based on a target service level.

    Our Approach

    ORMAE recommended a solution based on Poisson Distribution and Linear Programming and it was built taking into consideration the following:

    • Model factors (forecasting scheduled and unscheduled demands, Turn Around Time, and desired service levels).
    • Application of Poisson Distribution to fit historic and demand forecasts.
    • Estimated float using Poisson for desired service levels.
    • Linear programming to identify minimum costs.

    The Result

    Having submitted clearly defined requirements to ORMAE, the MRO got the desired results. They were reflected in the following metrics.

    • Reduction in inventory holding, purchase and other adjacent costs.
    • Maintaining and exceeding service levels, several notches above the existing standards.

    Get in Touch

    Have a project in mind?

    Looking for collaboration?
    Send an email to bd@ormae.com
    for availability and enquires.

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