Using repair priorities to reduce stock investment in spare part networks

Using repair priorities to reduce stock investment in spare part networks

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Article ID: iaor200625
Country: Netherlands
Volume: 163
Issue: 3
Start Page Number: 733
End Page Number: 750
Publication Date: Jun 2005
Journal: European Journal of Operational Research
Authors: , ,
Keywords: queues: applications
Abstract:

In this paper, we examine the impact of repair priorities in spare part networks. Several heuristics for assigning priorities to items as well as optimising stock levels are developed, extending the well-known VARI-METRIC method. We model repair shops by multi-class, multi-server priority queues. A proper priority setting may lead to a significant reduction in the inventory investment required to attain a target system availability (usually 10–20%). The saving opportunities are particularly high if the utilisation of the repair shops is high and if the item types sharing the same repair shop have clearly different characteristics (price, repair time). For example, we find an investment reduction of 73% for a system with single server repair shops with a utilisation of 0.90 that handle five different item types.

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