System dynamics simulation‐based model for coordination of a three‐level spare parts supply chain

Abstract

In some spare parts distribution systems for consumption goods, a portion of consumers’ demand is met by inventories in maintenance outlets, while the remaining portion is satisfied with emergency orders from the supplier, which can enhance customers’ satisfaction but cause added order‐processing costs and transportation costs. Faced with the trade‐off between the supplier's and outlet's profits, it is highly crucial to design and coordinate a supply chain in a way that determines to what extent each level should hold inventories by considering classification of spare parts. Therefore, in this paper, a system dynamics approach is used to design a three‐level supply chain simulation model consisting of one business unit, one distribution center, and one maintenance outlet. The business unit and distribution center belong to one company, so we consider them as one supplier. Therefore, we focus on the coordination between the distribution center and the maintenance outlet. The objective is to propose a contract to enhance these two parties’ profits. Through numerical analysis, we provide a contract with which the spare parts in class A are differentiated in their normal and emergency procurement prices and the spare parts in class B and class C have a prescribed customer service level. Using this type of contract, both distribution center's and maintenance outlet's profits can be enhanced, and the management process can be simplified.

Asset Management Framework and Tools for Facing Challenges in the Adoption of Product-Service Systems

“…Among others, Teixeira et al [15] studied the impact of optimising predictive maintenance decisions, supported by online simulation in PSS; and Jin et al [44] explored the transition of the maintenance paradigm from productoriented to result-oriented PSS. Furthermore, many authors have focused on ensuring that the supply chain is able to support AM activities in service-oriented business models (TC5), specially in terms of providing needed spare parts for maintenance (see [45]).…”

“…Simulation tools, which have already been successfully utilized to solve engineering problems [60], allow modelling as is scenarios and then analyse how different decisions would affect those situations (what if scenarios). Based on this concept, simulation models have been implemented for optimising decisions regarding both product-service systems design [61], [62] and asset management, especially in terms of maintenance and spare parts supply [45], [58]. Likewise, some researches have been focused on optimising specific asset management problems, such as prognostics or health management, in the context of PSS [15].…”

Pemodelan Multi Channel dengan Lotsize Berbeda: Menggunakan Pendekatan Kontinyu

“…Teknik pemodelan secara kontinyu menggunakan konsep system dynamics yang dikembangkan oleh [2], [3] dan [4] dapat digunakan dengan menganggap entitas sistem merupakan suatu fluida (kontinyu). Teknik system dynamics ini kini sudah diaplikasikan untuk memodelkan berbagai jenis sistem diskrit ( [5], [6], [7], [8]).…”

Spare Parts Inventory Management: A Literature Review

“…In contrast, eight studies adopt the LCC measure and two studies use the TCO measure, respectively. There are four studies using other measures such as company profits of selling products and providing warranty services [11,22], profits of using spare parts inventory pooling among different companies [23], and warranty cost [24]. This observation indicates that research on spare parts inventory management should consider advanced warranty types.…”

“…On this topic, efforts are made to investigate the performance of different combinations of inventory policies and maintenance strategies. Note that several studies consider the service contracts design for after-sales services providers [23,24,31,36].…”