Insights into inventory sharing in service parts logistics systems with time-based service levels

Insights into inventory sharing in service parts logistics systems with time-based service levels

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Article ID: iaor2009879
Country: Netherlands
Volume: 54
Issue: 3
Start Page Number: 341
End Page Number: 358
Publication Date: Apr 2008
Journal: Computers & Industrial Engineering
Authors:
Keywords: inventory, service
Abstract:

Service parts logistics systems are usually characterized by very low random demand, high part cost, and target time-based service levels, all of which lead inventory planners to utilize inventory sharing or ‘emergency lateral transshipments’ across multiple stocking locations. Using a stylized model with one central warehouse and multiple local stocking locations, we seek insights into the behavior of an inventory sharing system with time-based service level considerations. The goal of inventory sharing is to satisfy a demand in case a local facility is out of stock, by meeting the demand with a direct delivery from another location that can provide the service within the time window necessary for the target service level. We adapt an existing model from the literature for such a system.

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