AbstractIn this article we model a two‐echelon (two levels of repair, one level of supply) repairable‐item inventory system using continuous‐time Markov processes. We analyze two models. In the first model we assume a system with a single base. In the second model we expand this model to includenbases. The Markov approach gives rise to multidimensional state spaces that are large even for relatively small problems. Because of this, we utilize aggregate/disaggregate techniques to develop a solution algorithm for finding the steady‐state distribution. This algorithm is exact for the single‐base model and is an approximation for then‐base model, in which case it is found to be very accurate and computationally ver