Trade-off between inventory and repair capacity in spare part networks

A Sleptchenko (), M C van der Heijden and A van Harten
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A Sleptchenko: Eindhoven University of Technology
M C van der Heijden: University of Twente
A van Harten: University of Twente

Journal of the Operational Research Society, 2003, vol. 54, issue 3, 263-272

Abstract: Abstract The availability of repairable technical systems depends on the availability of (repairable) spare parts, to be influenced by (1) inventory levels and (2) repair capacity. In this paper, we present a procedure for simultaneous optimisation of these two factors. Our method is based on a modification of the well-known VARI-METRIC procedure for determining near-optimal spare part inventory levels and results for multi-class, multi-server queuing systems representing repair shops. The modification is required to avoid non-convexity problems in the optimisation procedure. To include part-time and overtime working, we allow for a non-integer repair capacity. To this end, we develop a simple approximation for queuing systems with a non-integer number of servers. Our computational experiments show that the near-optimal utilisation rate of the repair servers is usually high (0.80–0.98) and depends mainly on the relative price of the servers compared with inventory items. Further, the size of the repair shop (the minimal number of servers required for a stable system) plays its part. We also show that our optimisation procedure is robust for the choice of the step size for the server capacity.

Keywords: inventory; queuing; logistics; spare parts (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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DOI: 10.1057/palgrave.jors.2601511

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