Reference : Expediting in Two-Echelon Spare Parts Inventory Systems
E-prints/Working papers : First made available on ORBilu
Business & economic sciences : Production, distribution & supply chain management
Expediting in Two-Echelon Spare Parts Inventory Systems
Drent, Melvin mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Arts, Joachim mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
[en] inventory ; spare-parts ; multi-item ; repair ; expediting ; multi-echelon ; column generation
[en] We consider a two-echelon spare parts inventory system consisting of one central warehouse and multiple local warehouses. Each warehouse keeps multiple types of repairable parts to maintain several types of capital goods. The local warehouses face Poisson demand and are replenished by the central warehouse. We assume that unsatisfied demand is backordered at all warehouses. Furthermore, we assume deterministic lead times for the replenishments of the local warehouses. The repair shop at the central warehouse has two repair options for each repairable part: a regular repair option and an expedited repair option. Both repair options have stochastic lead times. Irrespective of the repair option, each repairable part uses a certain resource for its repair. Assuming a dual-index policy at the central warehouse and base stock control at the local warehouses, an exact and efficient evaluation procedure for a given control policy is formulated. To find an optimal control policy, we look at the minimization of total investment costs under constraints on both the aggregate mean number of backorders per capital good type and the aggregate mean fraction of repairs that are expedited per repair resource. For this non-linear non-convex integer programming problem, we develop a greedy heuristic and an algorithm based on decomposition and column generation. Both solution approaches perform very well with average optimality gaps of 1.56 and 0.23 percent, respectively, across a large test bed of industrial size. Based on a case study at Netherlands Railways, we show how managers can significantly reduce the investment in repairable spare parts when dynamic repair policies are leveraged to prioritize repair of parts whose inventory is critically low.
Fonds National de la Recherche - FnR

File(s) associated to this reference

Fulltext file(s):

Open access
Expediting_Drent_Arts_2018_V2.pdfAuthor preprint587.15 kBView/Open

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.