Purchase of Spare

Purchasing a spare does not affect the Failure Probability, but it can reduce the Consequences of Failure. The availability of a spare will reduce the expected outage duration, resulting in an effectively lower risk cost curve. Optimizing the timing of a spare purchase requires calculating the year-by-year benefit (red/blue shaded area). The age associated with the largest benefit is the age at which the spare should be optimally purchased. A spare is cost-effective if the benefit of the spare exceeds the cost of the spare.

A spare may backup multiple assets. The net benefit of the spare would then be the sum of all the individual asset benefits, less the capital cost of the spare.

Continue to Multiple Asset Decisions.


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