Article ID: | iaor20062426 |
Country: | United Kingdom |
Volume: | 56 |
Issue: | 12 |
Start Page Number: | 1419 |
End Page Number: | 1430 |
Publication Date: | Dec 2005 |
Journal: | Journal of the Operational Research Society |
Authors: | Houtum G.J. van, Cattrysse D., Wong H., Oudheusden D. van |
Keywords: | heuristics |
This paper deals with the analysis of a multi-item, continuous review model of a multi-location inventory system of repairable spare parts, in which lateral and emergency shipments occur in response to stock-outs. The objective is to determine close-to-optimal stocking policies minimizing the total cost for inventory holding, lateral transshipments, and emergency shipments subject to a target level for the average waiting times at all locations. We structure the optimization problem as a combinatorial problem and four different heuristics are developed and evaluated in terms of their total costs and computation times. It is shown that the greedy-type heuristic has the best performance. A numerical study is carried out to look at the relative cost savings obtained from the use of multi-item approach and lateral transshipments.