Abstract
Suppliers of capital goods increasingly offer performance-based service contracts with customer-specific service levels. We use selective emergency shipments of spare parts to differentiate logistic performance: We apply emergency shipments in out-of-stock situations for combinations of parts and customer classes that yield service levels close to the class-specific targets. We develop two heuristics to solve this problem. An extensive numerical experiment reveals average cost savings of 4.4% compared to the one-size-fits-all approach that is often used in practice. It is best to combine our policy with critical levels, which yields an average cost saving of 13.9%.
Original language | English |
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Pages (from-to) | 518-526 |
Number of pages | 20 |
Journal | International journal of production economics |
Volume | 143 |
Issue number | 2 |
DOIs | |
Publication status | Published - 2013 |
Keywords
- METIS-285357
- IR-79922