Service parts inventory control with lateral transshipment and pipeline stockflexibility

Guangyuan Yang, Rommert Dekker, Adriana F. Gabor and Sven Axsäter

International Journal of Production Economics, 2013, vol. 142, issue 2, 278-289

Abstract: In equipment-intensive industries such as truck, electronics, aircraft and dredging vessel manufacturing, service parts are often slow moving items for which the transshipment time is not negligible. However, this aspect is hardly considered in the existing service logistics literature. In this paper, we consider this aspect and propose a customer-oriented service measure which takes into account pipeline stock and lateral transshipment flexibility. We provide an approximation method for optimizing the stock allocation subject to this service measure. Via extensive numerical experiments, we show that our approximation performs very well with respect to both system performance and costs. Moreover, our numerical experiments indicate that including lateral transshipments and pipeline stock flexibility in inventory decisions is more beneficial than lateral transshipments alone. This effect is larger for high demand rates and high lateral transshipment costs. Results from a case study in the dredging industry confirm our findings. We therefore recommend introduction of pipeline stock information such as the track and trace information from freight carriers in existing ERP systems.

Keywords: Customer-oriented service measure; Response time; Lateral transshipment flexibility; Pipeline stock flexibility; Maritime applications (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527312004756
Full text for ScienceDirect subscribers only

Related works:
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:eee:proeco:v:142:y:2013:i:2:p:278-289

DOI: 10.1016/j.ijpe.2012.11.009

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().