TY - JOUR
T1 - A Two-Echelon Spare Parts Network with Lateral and Emergency Shipments
T2 - A Product-From Approximation
AU - Boucherie, Richardus J.
AU - van Houtum, Geert-Jan
AU - Timmer, Judith
AU - van Ommeren, Jan-Kees
N1 - Cambridge UP deal
PY - 2018/10/1
Y1 - 2018/10/1
N2 - We consider a single-item, two-echelon spare parts inventory model for repairable parts for capital goods with high downtime costs. The inventory system consists of multiple local warehouses, a central warehouse, and a central repair facility. When a part at a customer fails, if possible his request for a ready-for-use part is fulfilled by his local warehouse. Also, the failed part is sent to the central repair facility for repair. If the local warehouse is out of stock, then, via an emergency shipment, a ready-for-use part is sent from the central warehouse if it has a part in stock. Otherwise, it is sent via a lateral transshipment from another local warehouse, or via an emergency shipment from the external supplier. We assume Poisson demand processes, generally distributed leadtimes for replenishments, repairs, and emergency shipments, and a basestock policy for the inventory control.Our inventory system is too complex to solve for a steady-state distribution in closed form. We approximate it by a network of Erlang loss queues with hierarchical jump-over blocking. We show that this network has a product-form steady-state distribution. This enables an efficient heuristic for the optimization of basestock levels, resulting in good approximations of the optimal costs.
AB - We consider a single-item, two-echelon spare parts inventory model for repairable parts for capital goods with high downtime costs. The inventory system consists of multiple local warehouses, a central warehouse, and a central repair facility. When a part at a customer fails, if possible his request for a ready-for-use part is fulfilled by his local warehouse. Also, the failed part is sent to the central repair facility for repair. If the local warehouse is out of stock, then, via an emergency shipment, a ready-for-use part is sent from the central warehouse if it has a part in stock. Otherwise, it is sent via a lateral transshipment from another local warehouse, or via an emergency shipment from the external supplier. We assume Poisson demand processes, generally distributed leadtimes for replenishments, repairs, and emergency shipments, and a basestock policy for the inventory control.Our inventory system is too complex to solve for a steady-state distribution in closed form. We approximate it by a network of Erlang loss queues with hierarchical jump-over blocking. We show that this network has a product-form steady-state distribution. This enables an efficient heuristic for the optimization of basestock levels, resulting in good approximations of the optimal costs.
KW - UT-Hybrid-D
KW - Multi-echelon
KW - Product-form solution
KW - Spare parts inventory control
KW - Emergency shipments
U2 - 10.1017/S0269964817000365
DO - 10.1017/S0269964817000365
M3 - Article
SN - 0269-9648
VL - 32
SP - 536
EP - 555
JO - Probability in the engineering and informational sciences
JF - Probability in the engineering and informational sciences
IS - 4
ER -