The paper is to optimize the cost and storing spaces of the inventory of the Firms’ HVAC spare parts without affecting the minimum required quantity of spare parts. Three models were introduced and simulated to calculate the required spare parts and their cost. The results of each model were evaluated and compared against the base case and the other proposed model. The best model was found that warehouse will be grouped into three groups based on their geographical locations. All the spare parts required for all locations in each group will be consolidated and allowed the lateral movement between group’s locations. The cost can be reduced by 28 percent, and the number of parts can be less by 25 percent.