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Inventory Management in Multi-echelon After-Sales Service Networks

In: Pursuing Sustainability

Author

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  • Sandeep Srivathsan

    (Great Lakes Institute of Management)

Abstract

The rapid improvement in production technology over the last two decades has reduced the difference in quality of products produced by competitors. This has resulted in a paradigm shift in the outlook of firms from a product-centric view to a more customer-centric view. Consequently, after-sales service or warranty is high on the agenda of firms in a service supply chain. In general, firms offer service contracts that guarantee a quick turnaround time for repair of faulty components, while ensuring full functionality of their returned product. In this chapter, we focus on such contracts from an inventory management perspective in a multi-echelon service supply chain. The customer returns arrive at various service centers spread over a region. The repair activity essentially involves identifying the faulty component, and replacing it with a repaired component (if available) or with a new component. The faulty components are then collected and sent to a common repair center. The repaired components are then returned to the service centers, where they shall be used to satisfy demand generated by future returns. The problem is modeled using M/M/1/K queueing system, and we derive properties of the total cost function.

Suggested Citation

  • Sandeep Srivathsan, 2021. "Inventory Management in Multi-echelon After-Sales Service Networks," International Series in Operations Research & Management Science, in: Chialin Chen & Yihsu Chen & Vaidyanathan Jayaraman (ed.), Pursuing Sustainability, chapter 0, pages 199-218, Springer.
    • Handle: RePEc:spr:isochp:978-3-030-58023-0_8
    DOI: 10.1007/978-3-030-58023-0_8
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