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An adaptive base stock policy for repairable item inventory control

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  • Selçuk, B.

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.

Suggested Citation

  • Selçuk, B., 2013. "An adaptive base stock policy for repairable item inventory control," International Journal of Production Economics, Elsevier, vol. 143(2), pages 304-315.
    • Handle: RePEc:eee:proeco:v:143:y:2013:i:2:p:304-315
    DOI: 10.1016/j.ijpe.2012.01.011
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