An adaptive base stock policy for repairable item inventory control

B. Selçuk

International Journal of Production Economics, 2013, vol. 143, issue 2, 304-315

Abstract: This paper presents an adaptive base stock policy for a repairable item inventory control problem. Base stock level of a repairable item is updated based on the work-in-process (WIP) inventory level in repair facility with update frequency modeled as a separate tactical control parameter together with a standard base stock level. Stock-out situations are handled by emergency shipments, and priority shipments are used when updating the base stock level. A single-item single-location problem is considered, with repair facility having a limited capacity, and the problem is modeled by a two-dimensional continuous-time Markov chain, which is then solved explicitly by using matrix geometric methods. Numerical results are provided that show, for a given downtime target, the new policy achieves substantial reduction in inventory on-hand and significant saving in total cost.

Keywords: Repairable item; Inventory; Base stock; Work-in-process; Markov chain; Quasi-birth-death (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:143:y:2013:i:2:p:304-315

DOI: 10.1016/j.ijpe.2012.01.011

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