zbMATH — the first resource for mathematics

Optimizing reliability and service parts logistics for a time-varying installed base. (English) Zbl 1244.90076
Summary: Performance based contracting (PBC) emerges as a new after-sales service practice to support the operation and maintenance of capital equipment or systems. Under the PBC framework, the goal of the study is to increase the system operational availability while minimizing the logistics footprint through the design for reliability. We consider the situation where the number of installed systems randomly increases over the planning horizon, resulting in a non-stationary maintenance and repair demand. Renewal equation and Poisson process are used to estimate the aggregate fleet failures. We propose a dynamic stocking policy that adaptively replenishes the inventory to meet the time-varying parts demand. An optimization model is formulated and solved under a multi-phase adaptive inventory control policy. The study provides theoretical insights into the performance-driven service operation in the context of changing system fleet size due to new installations. Trade-offs between reliability design and inventory level are examined and compared in various shipment scenarios. Numerical examples drawn from semiconductor equipment industry are used to demonstrate the applicability and the performance of the proposed method.

90B25 Reliability, availability, maintenance, inspection in operations research
90B06 Transportation, logistics and supply chain management
90B05 Inventory, storage, reservoirs
Full Text: DOI
[1] Berkowitz, D., Gupta, J., Simpson, J.T., McWilliams, J.B. 2004. Defining and implementing performance-based logistics in government. Defense AR Journal. <http://findarticles.com/p/articles/mi_m0SVI/is_3_11/ai_n13821991/>.
[2] Chen, M.S., On the computational complexity of reliability redundancy allocation in a series system, Operations research letters, 11, 5, 309-315, (1992) · Zbl 0767.90021
[3] Coit, D.W.; Jin, T.; Wattanapongsakorn, N., System optimization considering component reliability estimation uncertainty: multi-criteria approach, IEEE transactions on reliability, 53, 3, 369-380, (2004)
[4] Diaz, A.; Fu, M., Models for multi-echelon repairable item inventory systems with limited repair capacity, European journal of operational research, 97, 3, 480-492, (1997) · Zbl 0927.90003
[5] Gadiesh, O.; Gilbert, J.L., Profit pools: a fresh look at strategy, Harvard business review, 76, 3, 139-147, (1998)
[6] Garvey, L., 2005. Navy Success with PBL. DAU/PMI Conference, Transforming DoD Logistics.
[7] Graves, S., A multi-echelon inventory model for a repairable item with one-to-one replenishment, Management science, 31, 10, 1247-1256, (1985) · Zbl 0601.90035
[8] Graves, S.C.; Willems, S.P., Strategic inventory placement in supply chains: nonstationary demand, Manufacturing & service operations management, 10, 2, 278-287, (2008)
[9] Gupta, O.K.; Ravindran, A., Branch and bound experiments in convex nonlinear integer programming, Management science, 31, 12, 1533-1546, (1985) · Zbl 0591.90065
[10] Huang, H.Z.; Liu, H.J.; Murthy, D.N.P., Optimal reliability, warranty and price for new products, IIE transactions, 39, 8, 819-827, (2007)
[11] Jalil, M.N.; Zuidwijk, R.A.; Fleischmann, M.; Jo van Nunen, A.E.E., Spare parts logistics and installed base information, Journal of the operational research society, 62, 442-457, (2011)
[12] Jin, T.; Gonigunta, L., Weibull and gamma renewal approximation using generalized exponential functions, Communication in statistics-B: simulation and computation, 38, 1, 154-171, (2009) · Zbl 1163.60041
[13] Jin, T.; Liao, H., Spare parts inventory control considering stochastic growth of an installed base, Computers & industrial engineering, 56, 1, 452-460, (2009)
[14] Kennedy, W.J.; Patterson, J.W.; Fredenhall, L.D., An overview of recent literature on spare parts inventories, International journal of production economics, 76, 2, 210-215, (2002)
[15] Kim, S.H.; Cohen, M.A.; Netessine, S., Performance contracting in after-sales service supply chains, Management science, 53, 12, 1843-1858, (2007) · Zbl 1232.90117
[16] Kratz, L., 2005. Logistics Transformation. In: Mid-Atlantic Logistics Conference. International Society of Logistics.
[17] Kuo, W.; Wan, R., Recent advances in optimal reliability allocation, IEEE transactions on systems, man, and cybernetics, 37, 2, 143-156, (2007)
[18] Marseguerra, M.; Zio, E.; Podofillini, L., Multi-objective spare parts allocation by means of genetic algorithms and Monte Carlo simulations, Reliability engineering and system safety, 87, 3, 325-335, (2005)
[19] Mettas, A. 2000. Reliability allocation and optimization for complex systems. In: Proceedings of Annual Reliability and Maintainability Symposium, pp. 216-221.
[20] Muckstadt, J.A., Analysis and algorithms for service parts supply chains, (2005), Springer New York · Zbl 1080.90002
[21] Murthy, D.N.P.; Solem, O.; Roren, T., Product warranty logistics: issues and challenges, European journal of operational research, 156, 1, 110-126, (2004) · Zbl 1045.90024
[22] Nowicki, D.; Kumar, U.D.; Steudel, H.J.; Verma, D., Spares provisioning under performance-based logistics contract: profit-centric approach, The journal of the operational research society, 59, 3, 342-352, (2008) · Zbl 1145.90326
[23] Oliva, R.; Kallenberg, R., Managing the transition from products to services, International journal of service industry management, 14, 2, 160-172, (2003)
[24] Öner, K.B.; Kiesmüller, G.P.; van Houtum, G.J., Optimization of component reliability in the design phase of capital goods, European journal of operational research, 205, 3, 615-624, (2010) · Zbl 1188.90081
[25] Randall, W.S.; Pohlen, T.L.; Hanna, J.B., Evolving a theory of performance based logistics using insights from service dominant logic, Journal of business logistics, 31, 2, 35-62, (2010)
[26] Sana, S.S., A production-inventory model in an imperfect production process, European journal of operational research, 200, 2, 451-464, (2010) · Zbl 1177.90027
[27] Sarkar, B.; Chaudhuri, K.; Sana, S.S., A stock-dependent inventory model in an imperfect production process, International journal of procurement management, 3, 4, 361-378, (2010)
[28] Sherbrooke, C.C., METRIC: a multi-echelon technique for recoverable item control, Operations research, 16, 1, 122-141, (1968)
[29] Sherbrooke, C.C., Multiechelon inventory systems with lateral supply, Naval research logistics, 39, 1, 29-40, (1992) · Zbl 0825.90339
[30] Xie, M., On the solution of renewal-type integral equations, Communications in statistics-B: simulation and computation, 18, 1, 281-293, (1989) · Zbl 0727.65121
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.