Simple, efficient heuristics for multi-item multi-location spare parts systems with lateral transshipments and waiting time constraints

Simple, efficient heuristics for multi-item multi-location spare parts systems with lateral transshipments and waiting time constraints

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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: , , ,
Keywords: heuristics
Abstract:

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.

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