Inventory management of spare parts in an energy company

Mario Guajardo, Mikael Rönnqvist, Ann Mari Halvorsen and Svein Inge Kallevik
Additional contact information
Mikael Rönnqvist: NHH Norwegian School of Economics, Bergen, Norway
Ann Mari Halvorsen: Statoil ASA, Sandsli, Norway
Svein Inge Kallevik: Statoil ASA, Sandsli, Norway

Journal of the Operational Research Society, 2015, vol. 66, issue 2, 331-341

Abstract: We address the problem of how to determine control parameters for the inventory of spare parts of an energy company. The prevailing policy is based on an (s, S) system subject to a fill rate constraint. The parameters are decided based mainly on the expert judgment of the planners at different plants. The company is pursuing to conform all planners to the same approach, and to be more cost efficient. Our work focuses on supporting these goals. We test seven demand models using real-world data for about 21 000 items. We find that significant differences in cost and service level may appear from using one or another model. We propose a decision rule to select an appropriate model. Our approach allows us to recommend control parameters for 97.9% of the items. We also explore the impact of pooling inventory for different demand sources and the inaccuracy arising from duplicate item codes.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.palgrave-journals.com/jors/journal/v66/n2/pdf/jors20148a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jors/journal/v66/n2/full/jors20148a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Inventory management of spare parts in an energy company (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jorsoc:v:66:y:2015:i:2:p:331-341

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/41274

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald and Jonathan Crook

More articles in Journal of the Operational Research Society from Palgrave Macmillan, The OR Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().