TY - JOUR
T1 - Last time buy and repair decisions for spare parts
AU - Behfard, S.
AU - van der Heijden, M.C.
AU - Al Hanbali, A.
AU - Zijm, W.H.M.
PY - 2015
Y1 - 2015
N2 - Original Equipment Manufacturers (OEM's) of advanced capital goods often offer service contracts for system support to their customers, for which spare parts are needed. Due to technological changes, suppliers of spare parts may stop production at some point in time. As a reaction to that decision, an OEM may place a so-called Last Time Buy (LTB) order to cover demand for spare parts during the remaining service period, which may last for many years. The fact that there might be other alternative sources of supply in the next periods complicates the decision on the LTB. In this paper, we develop a heuristic method to find the near-optimal LTB quantity in presence of an imperfect repair option of the failed parts that can be returned from the field. Comparison of our method to simulation shows high approximation accuracy. Numerical experiments reveal that repair is an excellent option as alternative sourcing, even if it is more expensive than buying a new part, because of the option to postpone the repair until the parts are needed. In addition, we show the impact of other key parameters on costs and LTB quantity.
AB - Original Equipment Manufacturers (OEM's) of advanced capital goods often offer service contracts for system support to their customers, for which spare parts are needed. Due to technological changes, suppliers of spare parts may stop production at some point in time. As a reaction to that decision, an OEM may place a so-called Last Time Buy (LTB) order to cover demand for spare parts during the remaining service period, which may last for many years. The fact that there might be other alternative sources of supply in the next periods complicates the decision on the LTB. In this paper, we develop a heuristic method to find the near-optimal LTB quantity in presence of an imperfect repair option of the failed parts that can be returned from the field. Comparison of our method to simulation shows high approximation accuracy. Numerical experiments reveal that repair is an excellent option as alternative sourcing, even if it is more expensive than buying a new part, because of the option to postpone the repair until the parts are needed. In addition, we show the impact of other key parameters on costs and LTB quantity.
KW - 2023 OA procedure
U2 - 10.1016/j.ejor.2015.02.003
DO - 10.1016/j.ejor.2015.02.003
M3 - Article
SN - 0377-2217
VL - 244
SP - 498
EP - 510
JO - European journal of operational research
JF - European journal of operational research
IS - 2
ER -