How Do You Maintain Stock In Spare Parts?

What is spare part inventory?

A spare part, spare, service part, repair part, or replacement part, is an interchangeable part that is kept in an inventory and used for the repair or replacement of failed units.

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Why is the EOQ formula not useful for spare parts?

Management and Costing fractional spares have no existence this will be rounded off to 1. Even with large values of Q, the EOQ is hardly more than 2 or 3, because the high cost items usually have very law consumption (failure) rate and the product (Unit Cost Annual consumption) will be small.

How is EOQ calculated?

EOQ formula Multiply the demand by 2, then multiply the result by the order cost. Divide the result by the holding cost. Calculate the square root of the result to obtain EOQ.

How do you market car parts?

Auto Parts Marketing Ideas – Get Inspired!Produce an installation video. … Sponsor a build. … Hold your own car show. … Dyno test performance products, and promote the results. … Cross promote with another automotive company. … Offer free shipping, either as a special promo or a new standard policy. … Run a Facebook contest. … Start Retargeting (aka Remarketing).More items…

How is EOQ formula derived?

The total cost function and derivation of EOQ formula This is P × D. Ordering cost: This is the cost of placing orders: each order has a fixed cost K, and we need to order D/Q times per year. This is K × D/Q. Holding cost: the average quantity in stock (between fully replenished and empty) is Q/2, so this cost is h × Q …

How do I manage my spare parts inventory?

9 Tips for Managing and Optimizing Spare Parts InventoryChoose a Method for Labeling Critical Components. … Balance Inventory Volume With Sawtooth Diagrams. … Keep Your Bill of Materials up to Date. … Calculate Optimal Economic Order Quantity. … Develop a Standard Work Order Process. … Focus on Inventory Control During Employee Training. … Perform Cycle Counts on a Regular Basis.More items…

What are the 4 types of inventory?

There are four types, or stages, that are commonly referred to when talking about inventory:Raw Materials.Unfinished Products.In-Transit Inventory, and.Cycle Inventory.

What are 3 types of inventory?

Manufacturers deal with three types of inventory. They are raw materials (which are waiting to be worked on), work-in-progress (which are being worked on), and finished goods (which are ready for shipping).

What does spare parts mean?

: an extra part of a vehicle or machine kept for use in emergency or replacement.

How can I increase sales in my spare parts?

6 Expert Tips to Grow Parts Department Sales at the DealershipPrioritize Customer Service and Communication. These days, your customers have access to a lot of information. … Review your Pricing Strategy. … Improve your Stocking. … Launch an Online Sales Channel for Parts and Accessories. … Eliminate Obsolete Parts. … Try Marketing.

How do you manage maintenance inventory?

7 ways to improve maintenance inventory managementParts tracking. As we outlined above, searching for parts can be a huge waste of time and money. … Stock levels. … Reordering. … Managing inventory at multiple locations. … Eliminate obsolete parts. … Inventory reporting. … A single, integrated system.

What are the types of spare parts?

What Types of Spare Parts are There? Genuine, OEM, Aftermarket and Used Parts Explained.Genuine Original Equipment Parts. … Replacement Parts. … Aftermarket Parts. … Remanufactured Parts. … Reconditioned Parts. … Salvaged Parts.

Provided by the manufacturer, a Recommended Spare Parts List (RSPL) is a comprehensive list of spare parts needed to perform most equipment repairs and routine maintenance for a particular machine. Listed in each RSPL are factory recommended replacement parts for wear items as well as operator interface components.

What is EOQ example?

Example of How to Use EOQ It costs the company \$5 per year to hold a pair of jeans in inventory, and the fixed cost to place an order is \$2. The EOQ formula is the square root of (2 x 1,000 pairs x \$2 order cost) / (\$5 holding cost) or 28.3 with rounding.

How do you store spare parts?

Here are seven spare parts inventory management best practices for managing parts inventory more effectively:Systematically identify all parts. … Utilize and Manage the Bill of Materials (BOM) … Streamline the work order process. … Adopt security measures. … Centralize and consolidate parts. … Utilize an Inventory control system.More items…

How do you manage auto parts inventory?

Helpful Tips for Better Managing Your Auto Parts InventoryDon’t Overlook the Importance of Good Warehouse Personnel. Your department runs lean in personnel. … Store Your Parts Thoughtfully. … Put Parts Back Where They Came From. … Maintain Efficient Inventories. … Complete Regular Inventory Checks. … Have a Back-Up Plan.

Are spare parts considered inventory?

Repairable spare parts are classified as other non-current assets similar to property, plant and equipment, rather than inventory because such parts are repaired and re-used over a long period of time, between three and ten years, the same period over which such parts are amortized.

How do I start my own spare business?

How to Start Automobile Spare Parts BusinessOnly selling spares parts. This kind of business operates from a shop where the entrepreneur carries out either retail or wholesale selling of automobile spare parts. … Workshop Along With Retail Store. This includes a shop selling spare parts along with a workshop where the vehicles can be repaired. … Online Shop. … Franchise.