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After-sales services network design of a household appliances manufacturer

Author

Listed:
  • F. Tevhide Altekin

    (Sabancı University)

  • Ezgi Aylı

    (Sabancı University)

  • Güvenç Şahin

    (Sabancı University)

Abstract

After-sales services have become high-margin businesses that account for larger portions of corporate profits. Delivering the after-sales services is challenging as after-sales services supply chains are significantly different than production–distribution supply chains. The literature provides little guidance on the use of quantitative methods for after-sales services network design. We present a mixed integer linear programming problem formulation to determine warehouse locations, assign repair vendors to facilities and choose mode of transportation while minimizing the total network cost. We transform the large-scale real-life problem of a household appliances manufacturer into a smaller scale to solve optimally in reasonable time. Through a scenario-based approach, we evaluate different configurations of a decentralized network with choices of transportation mode. We test the sensitivity of the solutions. The total cost decreases with additional choices of transportation mode and only slightly increases with the next-day delivery policy while the network solution may change significantly.

Suggested Citation

  • F. Tevhide Altekin & Ezgi Aylı & Güvenç Şahin, 2017. "After-sales services network design of a household appliances manufacturer," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(9), pages 1056-1067, September.
    • Handle: RePEc:pal:jorsoc:v:68:y:2017:i:9:d:10.1057_s41274-016-0142-y
    DOI: 10.1057/s41274-016-0142-y
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    References listed on IDEAS

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