Lifetime Buy Quantity Optimization Software

[Download LOTE and Documentation]

Many part obsolescence mitigation strategies exist for managing obsolescence once it occurs, including: lifetime buy (also referred to as final order or Life Of Type - LOT buy), last-time buy (also referred to as bridge buy), part replacement, aftermarket sources, emulation, re-engineering, salvage, and design refresh/redesign of the system.  The opportunity to make lifetime buys is usually offered by manufacturers of electronic parts prior to part discontinuance (usually in the form of a published “last order date”).  Lifetime buys play a role in nearly every electronic part obsolescence management portfolio no matter what other reactive or pro-active strategies are being followed.

The management strategy associated with lifetime buys of electronic parts is to determine the optimum number of parts to purchase prior to the last order date.  For inexpensive parts, lifetime buys are likely to be well in excess of forecasted demand requirements due to minimum purchase requirements associated with the part delivery format.  However, for more expensive parts, buying excess inventory may become prohibitively expensive.  Lifetime buys are risky, as forecasting demand and sparing requirements for potentially 10-20 years into the future is not an exact science, especially in today's dynamic technology and market atmosphere. Lifetime buys also assume that the system design will remain static, which is seldom the case. Even if the product didn’t change and the number of parts needed in the future could be accurately estimated, stockpiling parts for the future may incur significant inventory and financial expenses.   In addition, the risk of parts being lost, un-usable when needed, or consumed by another program, all of which are very real occurrences for electronic part lifetime buys that may need to reside in inventory for 10 years or more, increases the risk associated with the lifetime buys in the inventory. Figure 1 shows an influence diagram associated with lifetime buys of electronic parts.

Figure 1: Electronic part lifetime buy influence diagram

The lifetime buy problem has two facets: 1) demand forecasting, and 2) lifetime buy quantity determination.  Demand forecasting is the process of predicting how many parts are going to be needed in the future.  The forecasted demand depends on sales forecasts and sustainment expectations for fielded systems.  The second part of the problem is the determination of how many parts should be purchased (lifetime buy quantity).  The LOTE tool available below focuses on the second part of the problem – the determination of optimum lifetime buy quantities based on uncertain demand forecasts and the other influences expressed in Figure 1.

The LOTE Software Tool

The LOTE tool (pronounced "latte" like the coffee) determines the optimal lifetime buy quantities that minimize the life cycle cost impact on long field life electronic systems.  The model takes into consideration the effects of equal run out (matched sets), and two different types of penalties: a) loss of profit penalty, and b) part procured from non-original source penalty, as well as coupling between various parts.  The present version of the tool only treats lifetime buys (not bridge buys).

Additional details of the model formulations and examples produced using the model can be found in the following publications:

P. Singh and P. Sandborn, “Lifetime Buy Quantity Prediction for the Mitigation of Technology Obsolescence,” December 2005.  -  only available to CALCE members.

Download LOTE Software and Documentation

The LOTE software application and associated documentation can be downloaded from the following links.  You will be queried for a CALCE login and password when downloading the materials below.  If you do not have a login and password please contact sandborn@calce.umd.edu; at this time appropriate logins and passwords are available only for CALCE members and other organizations associated with the development of the LOTE tool.  Note, the newest version of the LOTE tool is at the top of the table.

If you are having problems getting the LOTE application to start-up, click here.

Important Note:  At this time, the application is only for Windows operating system machines.

Release Date	LOTE Application Software Version	Documentation	Release Notes
January 18, 2007 (August 30, 2007 update)	Version 2.0 If you downloaded the LOTE tool but it won't start-up when you double click on the application - click here!	LOTE User's Guide, Version 2.0	Generalized demand and supply inputs 10x faster than older versions User defined refreshes to enable bridge buy prediction Streamlined analysis (Default and Development modes) All new documentation Online help Fixes for part naming problems
March 20, 2006	Version 1.1 - Prototype Version If you downloaded the LOTE tool but it won't start-up when you double click on the application - click here!	LOTE User's Guide, Version 1.1	Bug fixes and minor functionality upgrades
February 3, 2006	Version 1.0 - Prototype Version If you downloaded the LOTE tool but it won't start-up when you double click on the application - click here!	LOTE User's Guide, Version 1.0	Initial release of the tool

For questions or problems contact:  sandborn@calce.umd.edu