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Pooling through lateral transshipments in service parts systems

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  • Satır, Benhür
  • Savasaneril, Secil
  • Serin, Yasemin

Abstract

We study the inventory management problem of a service center operating in a decentralized service parts network. The service centers collaborate through inventory and service pooling, and through sharing information on the inventory status. Upon demand arrival, a service center may request a part from the other center, in which case a payment is made. Under this competitive and collaborative environment, we first characterize the optimal operating policy of an individual service center. Through computational analysis we identify the conditions under which pooling is most beneficial to the service center, and make an assessment of different pooling strategies which are commonly adopted in practice and in the literature. Finally, we analyze the effect of interaction between the centers on the benefit of pooling.

Suggested Citation

  • Satır, Benhür & Savasaneril, Secil & Serin, Yasemin, 2012. "Pooling through lateral transshipments in service parts systems," European Journal of Operational Research, Elsevier, vol. 220(2), pages 370-377.
    • Handle: RePEc:eee:ejores:v:220:y:2012:i:2:p:370-377
    DOI: 10.1016/j.ejor.2012.02.009
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    3. Samuel Vercraene & Jean-Philippe Gayon & Fikri Karaesmen, 2018. "Effects of System Parameters on the Optimal Cost and Policy in a Class of Multidimensional Queueing Control Problems," Operations Research, INFORMS, vol. 66(1), pages 150-162, January.

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