סמינר מחלקתי - המחלקה להנדסת תעשייה

Joint Stocking and Sourcing Policy for Repairable Parts

Izack Cohen, The Technion

Abstract:

After-sales service support for mission critical products has become a major strategic requirement for many companies and government organizations. Extensive supply chains consisting of networks of parts stocking locations and repair depots are maintained to deliver rapid product restoration and to support a high level of customer product fleet availability. This research demonstrate that flexibility based on simultaneous optimization of strategic repair allocation (sourcing) decisions and inventory stocking decisions can improve overall supply chain performance. We use a stylized two echelon, two location, single product model and develop structural results that are used in constructing a solution algorithm. These results are based on our derivation of closed form specifications of the key drivers of performance.  We analyze optimal joint stocking / sourcing policy and provide managerial insights derived from the solution. Our analysis has identified three types of repair sourcing policies which should be selected for a part on the basis of its cost and lead time attributes; i.e. central, where all repairs are sourced from a central depot, local, where all failures are repaired at the base and a mixed repair policy, where a fraction of the parts is repaired at the base and the remainder is repaired at the depot. Through an extended test case based on real world data we illustrate that a service goal for fleet availability can be satisfied with a lower investment in inventory and reduced repair costs, when compared to the current situation where repair allocation decisions are treated as an exogenous input to the stock control system. We develop, in particular, insights on when mixed vs. fixed source strategies should be adopted.  The algorithm introduced in this paper can be easily programmed and incorporated into existing commercial software packages and thus our results have high chance of being implemented.

The presentation is based on a mutual work with Morris A. Cohen from the Wharton School

ההרצאה תתקיים ביום ג', 13.03.12, בשעה 14:00 בחדר 206, בנין וולפסון הנדסה, הפקולטה להנדסה, אוניברסיטת תל-אביב.