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

Author

Listed:
  • A Sleptchenko

    (Eindhoven University of Technology)

  • M C van der Heijden

    (University of Twente)

  • A van Harten

    (University of Twente)

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.

Suggested Citation

  • A Sleptchenko & M C van der Heijden & A van Harten, 2003. "Trade-off between inventory and repair capacity in spare part networks," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(3), pages 263-272, March.
    • Handle: RePEc:pal:jorsoc:v:54:y:2003:i:3:d:10.1057_palgrave.jors.2601511
    DOI: 10.1057/palgrave.jors.2601511
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    References listed on IDEAS

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    Cited by:

    1. Nasuh Buyukkaramikli & Henny Ooijen & J. Bertrand, 2015. "Integrating inventory control and capacity management at a maintenance service provider," Annals of Operations Research, Springer, vol. 231(1), pages 185-206, August.
    2. Qin, Xuwei & Shao, Lusheng & Jiang, Zhong-Zhong, 2020. "Contract design for equipment after-sales service with business interruption insurance," European Journal of Operational Research, Elsevier, vol. 284(1), pages 176-187.
    3. Hu, Qiwei & Boylan, John E. & Chen, Huijing & Labib, Ashraf, 2018. "OR in spare parts management: A review," European Journal of Operational Research, Elsevier, vol. 266(2), pages 395-414.
    4. Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2013. "Multi-echelon, multi-indenture spare parts inventory control subject to system availability and budget constraints," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 95-101.
    5. Driessen, M.A. & van Houtum, G.J. & Zijm, W.H.M. & Rustenburg, W.D., 2020. "Capacity assignment in repair shops with high material uncertainty," International Journal of Production Economics, Elsevier, vol. 221(C).
    6. Qin, Xuwei & Jiang, Zhong-Zhong & Sun, Minghe & Tang, Liang & Liu, Xiaoran, 2021. "Repairable spare parts provisioning for multiregional expanding fleets of equipment under performance-based contracting," Omega, Elsevier, vol. 102(C).
    7. Sleptchenko, Andrei & Turan, Hasan Hüseyin & Pokharel, Shaligram & ElMekkawy, Tarek Y., 2019. "Cross-training policies for repair shops with spare part inventories," International Journal of Production Economics, Elsevier, vol. 209(C), pages 334-345.
    8. Brick, Eduardo Siqueira & Uchoa, Eduardo, 2009. "A facility location and installation of resources model for level of repair analysis," European Journal of Operational Research, Elsevier, vol. 192(2), pages 479-486, January.
    9. Turan, Hasan Hüseyin & Atmis, Mahir & Kosanoglu, Fuat & Elsawah, Sondoss & Ryan, Michael J., 2020. "A risk-averse simulation-based approach for a joint optimization of workforce capacity, spare part stocks and scheduling priorities in maintenance planning," Reliability Engineering and System Safety, Elsevier, vol. 204(C).
    10. de Smidt-Destombes, Karin S. & van der Heijden, Matthieu C. & van Harten, Aart, 2006. "On the interaction between maintenance, spare part inventories and repair capacity for a k-out-of-N system with wear-out," European Journal of Operational Research, Elsevier, vol. 174(1), pages 182-200, October.
    11. Knofius, N. & van der Heijden, M.C. & Zijm, W.H.M., 2019. "Consolidating spare parts for asset maintenance with additive manufacturing," International Journal of Production Economics, Elsevier, vol. 208(C), pages 269-280.
    12. Rezapour, Shabnam & Allen, Janet K. & Mistree, Farrokh, 2016. "Reliable product-service supply chains for repairable products," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 299-321.
    13. van der Heijden, M.C. & Alvarez, E.M. & Schutten, J.M.J., 2013. "Inventory reduction in spare part networks by selective throughput time reduction," International Journal of Production Economics, Elsevier, vol. 143(2), pages 509-517.
    14. Minjae Park & Ki Mun Jung & Dong Ho Park, 2016. "Optimal warranty policies considering repair service and replacement service under the manufacturer’s perspective," Annals of Operations Research, Springer, vol. 244(1), pages 117-132, September.
    15. Sun, Mingyao & Ng, Chi To & Wu, Feng & Cheng, T.C.E., 2022. "Optimization of after-sales services with spare parts consumption and repairman travel," International Journal of Production Economics, Elsevier, vol. 244(C).
    16. Voorberg, S. & van Jaarsveld, W. & Eshuis, R. & van Houtum, G.J., 2023. "Information acquisition for service contract quotations made by repair shops," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1166-1177.
    17. Rappold, James A. & Van Roo, Ben D., 2009. "Designing multi-echelon service parts networks with finite repair capacity," European Journal of Operational Research, Elsevier, vol. 199(3), pages 781-792, December.
    18. de Smidt-Destombes, Karin S. & van der Heijden, Matthieu C. & van Harten, Aart, 2009. "Joint optimisation of spare part inventory, maintenance frequency and repair capacity for k-out-of-N systems," International Journal of Production Economics, Elsevier, vol. 118(1), pages 260-268, March.

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