Joint Inventory and Scheduling Control in a Repair Facility

102 Pages Posted: 18 Feb 2021 Last revised: 18 Apr 2023

See all articles by Erhun Ozkan

Erhun Ozkan

Koc University - College of Administrative Sciences and Economics

Geert-Jan van Houtum

Eindhoven University of Technology (TUE)

Date Written: February 11, 2021

Abstract

We study inventory and repair scheduling decisions of a maintenance service provider for repairable capital goods. Due to high downtime costs, the service provider keeps spare parts on stock to replace broken parts quickly. The service provider should determine the inventory level of spare parts for each component and the repair scheduling policy. Furthermore, in case of a stock-out, the service provider should decide whether to backorder the demand or execute an emergency repair, which is an urgent but expensive repair operation for a broken part followed by a fast form of installation. The objective is to minimize the long-run average inventory holding, backorder, and emergency repair costs. We formulate the repairable network as a closed queueing system and consider an asymptotic regime in which the repair facility is in the conventional heavy-traffic regime. Then, we formulate and solve a Brownian control problem (BCP). From the optimal BCP solution, we derive a simple and intuitive decision rule stating whether emergency repairs are necessary or not to achieve a close-to-optimal system performance. Moreover, we propose a simple, intuitive, and easy-to-implement heuristic control policy and demonstrate its close-to-optimal performance via numerical experiments.

Keywords: Spare parts, inventory control, scheduling, asymptotic analysis

Suggested Citation

Ozkan, Erhun and van Houtum, Geert-Jan, Joint Inventory and Scheduling Control in a Repair Facility (February 11, 2021). Available at SSRN: https://ssrn.com/abstract=3784144 or http://dx.doi.org/10.2139/ssrn.3784144

Erhun Ozkan (Contact Author)

Koc University - College of Administrative Sciences and Economics ( email )

Rumelifeneri Yolu
Sariyer 80910, Istanbul
Turkey

Geert-Jan Van Houtum

Eindhoven University of Technology (TUE) ( email )

PO Box 513
Eindhoven, 5600 MB
Netherlands

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