Welcome to the InfoSci Platform
Reference Hub3
Meeting Correlated Spare Part Demands with Optimal Transshipments

Meeting Correlated Spare Part Demands with Optimal Transshipments

Nagihan Çömez, Kathryn E. Stecke, Metin Çakanyildirim
Copyright: © 2010 |Volume: 1 |Issue: 2 |Pages: 27
ISSN: 1947-8569|EISSN: 1947-8577|EISBN13: 9781609604547|DOI: 10.4018/jsds.2010040101
Cite Article Cite Article

MLA

Çömez, Nagihan, et al. "Meeting Correlated Spare Part Demands with Optimal Transshipments." IJSDS vol.1, no.2 2010: pp.1-27. http://doi.org/10.4018/jsds.2010040101

APA

Çömez, N., Stecke, K. E., & Çakanyildirim, M. (2010). Meeting Correlated Spare Part Demands with Optimal Transshipments. International Journal of Strategic Decision Sciences (IJSDS), 1(2), 1-27. http://doi.org/10.4018/jsds.2010040101

Chicago

Çömez, Nagihan, Kathryn E. Stecke, and Metin Çakanyildirim. "Meeting Correlated Spare Part Demands with Optimal Transshipments," International Journal of Strategic Decision Sciences (IJSDS) 1, no.2: 1-27. http://doi.org/10.4018/jsds.2010040101

Export Reference

Mendeley
Favorite Full-Issue Download

Abstract

This paper studies spare part transshipments between two service part facilities whose demands are correlated. Transshipments are used to reduce severity of part stock outs. Facilities are run by an inventory manager (IM) who minimizes replenishment, transshipment, and inventory costs. We show that the optimal transshipment policy is an inventory hold-back type; if the part inventory at a facility is less than or equal to its hold-back level, a transshipment request made for that part by a stocked out retailer is rejected. The hold-back levels increase toward the next replenishment of partsThis implies that transshipment requests are initially accepted until a critical time and afterwards they are rejected. A heuristic is designed using this critical time as the single decision variable. It performs within 0.7-1.8% of the optimal cost. Heuristic policies of no inventory sharing and complete sharing, respectively, perform within 3% and 2% of the optimal cost. Since the computation of hold-back levels and implementation of the optimal transshipments, respectively, require limited resources and little IM oversight, we advocate for the use of the optimal transshipment policy.

Request Access

You do not own this content. Please login to recommend this title to your institution's librarian or purchase it from the IGI Global bookstore.