Repairable Stocking and Expediting in a Fluctuating Demand Environment: Optimal Policy and Heuristics

Joachim Arts, Rob Basten, Geert-Jan Van Houtum
  • Operations Research, December 2016, INFORMS
  • DOI: 10.1287/opre.2016.1498

Repairable stocking and expediting

What is it about?

Repairable spare parts are a major inventory investment aimed to keep equipment such as aircraft, MRI scanners and manufacturing plants up and running. The performance of the inventory system depends on the number of repairables and policies in the repair shop. This paper explains how to optimize these two decisions for different demand scenarios.

Why is it important?

The interaction between stocking and repair is modeled in a tractable manner and insights about optimal policy are obtained. This paper also gives insight into the structure of optimal dual sourcing policies under a base-stock level constraint. Finally is shows that smart use of expediting is an effective buffer next to inventory to deal with uncertain and fluctuating demand.


Dr. Joachim J Arts (Author)
Technische Universiteit Eindhoven

This paper is based on actual practice but also builds some interesting theory. I like it because it combines these two worlds well.

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The following have contributed to this page: Dr. Joachim J Arts and Dr Rob Basten