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Service Parts Inventory Control with Lateral Transshipment that takes Time

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  • Guangyuan Yang

    (Erasmus University Rotterdam)

  • Rommert Dekker

    (Erasmus University Rotterdam)

Abstract

In equipment-intensive industries such as truck manufacturing, electronics manufacturing, photo copiers,and airliners, service parts are often slow moving items for which, in some cases, the transshipment timeis not negligible. However, this aspect is hardly considered in the existing spare parts literature. We assessthe effect of non-negligible lateral transshipment time on various aspects of spare parts inventory control.Furthermore, we introduce customer-oriented service levels by taking the uncommitted pipeline stocks intoaccount. A case study in the dredging industry shows that lateral transshipment may lead to lower systemperformance, which supports the results from some recent studies. Furthermore, we find that considerablesavings can be obtained when we include the uncommitted pipeline stocks in both base stock allocation andlateral transshipment decisions.

Suggested Citation

  • Guangyuan Yang & Rommert Dekker, 2010. "Service Parts Inventory Control with Lateral Transshipment that takes Time," Tinbergen Institute Discussion Papers 10-025/4, Tinbergen Institute, revised 10 Mar 2010.
    • Handle: RePEc:tin:wpaper:20100025
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    References listed on IDEAS

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    More about this item

    Keywords

    Inventory Control; Lateral Transshipment; METRIC; Customer-oriented Service Level;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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