
I learned actuarial methods for forecasting and spares planning while working for the US Air Force Logistics Command in the 1970s [AFLCM 66-17 and AFM 400-1]. I am grateful for the education, and I am sorry to report that the USAF has reverted to MTBF management.
The US AFLC actuarial methods were developed for engine management in the 1960s by RAND Corp. [Giesler] They estimated age-interval failure rates and made actuarial forecasts of engine demands depending on the flying-hour program plan. An actuarial forecast is ∑a(s)n(t-s), s=1,2,…,t, where a(s) is actuarial failure rate conditional on survival to age s and n(t-s) is the installed base of age t-s. Periodic meetings consolidated engine lifetime and failure data into agreements on actuarial failure rates, for forecasting engine demands and for war readiness spares requirements.
The USAF actuarial methods assume constant failure rates within short age intervals, Poisson demands, and ignore variance induced by variable flying hours per aircraft in the flying hour program. I later figured out how to estimate actuarial failure rates for all engines, major modules, and their service parts, with or without life-limits and without lifetime data; I computed the distribution of demand forecasts, not Poisson. I offered to show AFIT faculty, AFOSR, AFRL, and RAND how to extend actuarial methods to all service parts [George, 1993].
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