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A spare parts stocking policy based on equipment criticality

Author

Listed:
  • Dekker, R.
  • Kleijn, M.J.
  • de Rooij, P.J.

Abstract

Demand for spare parts can sometimes be classified into critical and non-critical demand, depending on the criticality of the equipment in which it is installed. To effectively handle this situation in spare parts inventory control, we propose a stocking policy where some of the stock is reserved for critical demand. For Poisson demand and a lot-for-lot stocking policy with positive replenishment leadtime, approximations of the service levels for both classes of demand are derived, and verified by simulation. Finally, a numerical example is presented to illustrate the advantages of using the proposed policy.

Suggested Citation

  • Dekker, R. & Kleijn, M.J. & de Rooij, P.J., 1996. "A spare parts stocking policy based on equipment criticality," Econometric Institute Research Papers EI 9625-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    • Handle: RePEc:ems:eureir:1384
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    References listed on IDEAS

    as
    1. Richard V. Evans, 1968. "Sales and Restocking Policies in a Single Item Inventory System," Management Science, INFORMS, vol. 14(7), pages 463-472, March.
    2. Arthur F. Veinott, 1965. "Optimal Policy in a Dynamic, Single Product, Nonstationary Inventory Model with Several Demand Classes," Operations Research, INFORMS, vol. 13(5), pages 761-778, October.
    3. Arthur F. Veinott, Jr., 1966. "The Status of Mathematical Inventory Theory," Management Science, INFORMS, vol. 12(11), pages 745-777, July.
    4. Donald M. Topkis, 1968. "Optimal Ordering and Rationing Policies in a Nonstationary Dynamic Inventory Model with n Demand Classes," Management Science, INFORMS, vol. 15(3), pages 160-176, November.
    5. Steven Nahmias & W. Steven Demmy, 1981. "Operating Characteristics of an Inventory System with Rationing," Management Science, INFORMS, vol. 27(11), pages 1236-1245, November.
    6. Alan Kaplan, 1969. "Stock Rationing," Management Science, INFORMS, vol. 15(5), pages 260-267, January.
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