In this paper, a new model has been presented to determine the number of spare transformers and their locations for distribution stations. The number of spare transformers must be so that they need minimum investment. Furthermore, they must be sufficient for replacing with transformers that have been damaged. For this reason, in this paper a new purpose function has been presented to maximize profit in distribution company’s budgeting and planning. For determining the number of spares that must be available in a stock room, this paper considers the number of spares and transformer’s fault at the same time. The number of spare transformers is determined so that at least one spare transformer will be available for replacing with the failed transformers. This paper considers time required for purchasing or repairing a failed transformer to determine the number of required spare transformers. Furthermore, whatever the number of spare equipment are increased, cost of maintenance will be increased, so an economic comparison must be done between reduced costs from reducing of outage time and increased costs from spare transformers existence.
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