A spare parts stocking policy based on equipment criticality

Dekker, Rommert; Kleijn, Marcel; Rooij, P.J. de

doi:10.1016/s0925-5273(97)00050-9

Cited by 131 publications

(87 citation statements)

References 6 publications

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“…52). Also, when the same item appears with different criticality indexes in different contexts, it would be interesting to measure the benefits of a threshold rationing policy, which gives priority to the demand in the highest criticality context (Deshpande et al [38], Dekker et al [39]), over the ( , ) policy with round-up service level bounds as considered in our case.…”

Section: Discussionmentioning

confidence: 99%

Inventory management of spare parts in an energy company

Guajardo

Rönnqvist

Halvorsen

et al. 2015

Journal of the Operational Research Society

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We address a problem of inventory management of spare parts in the context of a large energy company, producer of oil and gas. Spare parts are critical for assuring operational conditions in offshore platforms. About 200,000 different items are held in several inventory plants. The inventory system implemented at the company corresponds to a min-max system. The control parameters are decided based mainly on the expert judgment of the planners. Also, though the inventory plants can in practice be supplied from each other, the inventory planning is performed separately by the plant planners. This is because of different ownership structures where the studied company has the operative responsibility. The company is pursuing a system in which all planners conform to the same inventory management approach and evaluation, as well as being more cost efficient. Our work focuses on supporting this goal. We apply methods to decide the inventory control parameters for this system under a service level constraint. The methodology we use distinguishes unit-size and lot-size demand cases. We perform computational experiments to find control parameters for a sample of items. After the control parameters are found, we use them to explore the impact of risk pooling among the plants and inaccuracy arising from duplicate item codes. Key words:Email addresses: mario.guajardo@nhh.no corresponding author tel.: +47 55959834 fax: +47 55959650 (Mario Guajardo), mikael.ronnqvist@nhh.no (Mikael Rönnqvist), amaha@statoil.com (Ann Mari Halvorsen), svkal@statoil.com (Svein Inge Kallevik) Preprint submitted to NHH Discussion Series June 6, 2012Inventory of spare parts; risk pooling; duplicates; inventory inaccuracy; OR in the oil and gas sector.

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Section: Discussionmentioning

confidence: 99%

Inventory management of spare parts in an energy company

Guajardo

Rönnqvist

Halvorsen

et al. 2015

Journal of the Operational Research Society

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“…We can iteratively search 1  until Deshpande's optimal solutions satisfy the service constraint. We first set the lower bound of 1  is less than 6 10  . Although we can obtain feasible solutions in all the sets, the results are still unsatisfactory.…”

Section: Each Cell Contains Two Values Indicated As the Cost Gap Betweenmentioning

confidence: 99%

A heuristic for rationing inventory in two demand classes with backlog costs and a service constraint

Wang¹,

Tang²,

Huo³

2013

Computers & Operations Research

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, rQ system, we develop a critical level rationing policy in which a threshold mechanism is adopted to allocate backorders when multiple outstanding orders exist. Due to the problem complexity, a heuristic is developed based on the principle that both demand classes are served with respective target service levels. We also introduce bounds so that the search ranges of decision variables become restrictive. The numerical examples indicate an excellent performance of our heuristic. In addition, when ordering cost is medium or high, the threshold clearing mechanism has the same results as the optimal one. When ordering cost is small (set to zero), different clearing mechanisms should be used depending on the priorities of demand classes. Further analysis indicates that transforming the service constraint into a cost parameter and then applying the existing algorithm will not be a good approach for this problem with mixed performance criteria. It either increases the costs or violates the service constraint. This study also shows the importance of applying rationing policy when high priority class has a low demand volume, target service levels between two classes have a large gap, or replenishment lead time is long. The results of this study should enhance our understanding of how to implement rationing policies in practice.

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“…∆ x ν(t, x, s) = ν(t, x, s) − ν(t, x − 1, s) similar to the previous definition. Using (10) we assume that an arbitrary index j is the minimizer, therefore we have…”

Section: Service Contract-based Differentiationmentioning

confidence: 99%

Customer differentiated end-of-life inventory problem

Pourakbar

Dekker

2012

European Journal of Operational Research

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This paper deals with the service parts end-of-life inventory problem in a circumstance that demands for service parts are differentiated. Customer differentiation might be due to criticality of the demand or based on various service contracts. In both cases, we model the problem as a finite horizon stochastic dynamic program and characterize the structure of the optimal policy. We show that when customers are differentiated based on the demand criticality then the optimal structure consists of time and state dependent threshold levels for inventory rationing. In case of differentiation based on service contracts, we show that in addition to rationing thresholds we also need contract extension thresholds by which the system decides whether to offer an extension to an expiring contract or not. By numerical experiments in both cases, we identify the value of incorporating such decisions in service parts end-of-life inventory management with customer differentiation. Moreover, we show that these decisions not only result in cost efficiency but also decrease the risk of part obsolescence drastically.

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A spare parts stocking policy based on equipment criticality

Cited by 131 publications

References 6 publications

Inventory management of spare parts in an energy company

Inventory management of spare parts in an energy company

A heuristic for rationing inventory in two demand classes with backlog costs and a service constraint

Customer differentiated end-of-life inventory problem

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