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Optimal allocation of spares to maximize the window fill rate in a two-echelon exchangeable-item repair system

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  • Dreyfuss, Michael
  • Giat, Yahel

Abstract

We solve the spares allocation problem in a two-echelon, exchangeable-item repair system in which the lower echelon comprises multiple locations and the higher echelon is a single depot. We assume that customers tolerate a certain wait and therefore the optimization criterion is the window fill rate, i.e., the expected portion of customers who are served within the tolerable wait. We develop two algorithms to solve this problem. The first algorithm (FTEA) is formula-based and is suboptimal. The second algorithm (HTEA) combines simulations into the first algorithm and obtains a higher degree of accuracy at the cost of extra running time. We characterize the near-optimal solution by its degree of pooling and concentration. Pooling happens when spares are allocated to the depot and are therefore shared by all the lower-echelon locations. Concentration takes place when spares are allocated to only a few lower-echelon locations whereas the other lower-echelon locations receive no spares. We use numerical examples to compare the algorithms and to illustrate how the budget, shipment time, local repair and customer patience affect the optimal solution and degree of pooling in varying ways. Using the numerical results, we propose a third algorithm (ETEA) that obtains HTEA’s output in 30% of the time.

Suggested Citation

  • Dreyfuss, Michael & Giat, Yahel, 2018. "Optimal allocation of spares to maximize the window fill rate in a two-echelon exchangeable-item repair system," European Journal of Operational Research, Elsevier, vol. 270(3), pages 1053-1062.
    • Handle: RePEc:eee:ejores:v:270:y:2018:i:3:p:1053-1062
    DOI: 10.1016/j.ejor.2018.05.011
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    Citations

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    Cited by:

    1. Minan Tang & Chenchen Zhang & Yaqi Zhang & Yaguang Yan & Wenjuan Wang & Bo An, 2024. "A Dual-Layer MPC of Coordinated Control of Battery Load Demand and Grid-Side Supply Matching at Electric Vehicle Swapping Stations," Energies, MDPI, vol. 17(4), pages 1-26, February.
    2. Kouki, Chaaben & Arts, Joachim & Babai, M. Zied, 2024. "Performance evaluation of a two-echelon inventory system with network lost sales," European Journal of Operational Research, Elsevier, vol. 314(2), pages 647-664.
    3. Yahel Giat, 2024. "Stock Levels and Repair Sourcing in a Periodic Review Exchangeable Item Repair System," Logistics, MDPI, vol. 8(2), pages 1-19, March.
    4. Wang, Ziqi & Hou, Sizu, 2023. "A real-time strategy for vehicle-to-station recommendation in battery swapping mode," Energy, Elsevier, vol. 272(C).
    5. García-Benito, Juan Carlos & Martín-Peña, María-Luz, 2021. "A redistribution model with minimum backorders of spare parts: A proposal for the defence sector," European Journal of Operational Research, Elsevier, vol. 291(1), pages 178-193.
    6. Basten, Rob J.I. & Ryan, Jennifer K., 2019. "The value of maintenance delay flexibility for improved spare parts inventory management," European Journal of Operational Research, Elsevier, vol. 278(2), pages 646-657.
    7. Dreyfuss, Michael & Giat, Yahel, 2019. "Allocating spares to maximize the window fill rate in a periodic review inventory system," International Journal of Production Economics, Elsevier, vol. 214(C), pages 151-162.

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