IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v219y2012i2p324-334.html
   My bibliography  Save this article

Improving the computational efficiency of metric-based spares algorithms

Author

Listed:
  • Nowicki, David R.
  • Randall, Wesley S.
  • Ramirez-Marquez, Jose Emmanuel

Abstract

We propose a new heuristic algorithm to improve the computational efficiency of the general class of Multi-Echelon Technique for Recoverable Item Control (METRIC) problems. The objective of a METRIC-based decision problem is to systematically determine the location and quantity of spares that either maximizes the operational availability of a system subject to a budget constraint or minimizes its cost subject to an operational availability target. This type of sparing analysis has proven essential when analyzing the sustainment policies of large-scale, complex repairable systems such as those prevalent in the defense and aerospace industries. Additionally, the frequency of these sparing studies has recently increased as the adoption of performance-based logistics (PBL) has increased. PBL represents a class of business strategies that converts the recurring cost associated with maintenance, repair, and overhaul (MRO) into cost avoidance streams. Central to a PBL contract is a requirement to perform a business case analysis (BCA) and central to a BCA is the frequent need to use METRIC-based approaches to evaluate how a supplier and customer will engage in a performance based logistics arrangement where spares decisions are critical. Due to the size and frequency of the problem there exists a need to improve the efficiency of the computationally intensive METRIC-based solutions. We develop and validate a practical algorithm for improving the computational efficiency of a METRIC-based approach. The accuracy and effectiveness of the proposed algorithm are analyzed through a numerical study. The algorithm shows a 94% improvement in computational efficiency while maintaining 99.9% accuracy.

Suggested Citation

  • Nowicki, David R. & Randall, Wesley S. & Ramirez-Marquez, Jose Emmanuel, 2012. "Improving the computational efficiency of metric-based spares algorithms," European Journal of Operational Research, Elsevier, vol. 219(2), pages 324-334.
    • Handle: RePEc:eee:ejores:v:219:y:2012:i:2:p:324-334
    DOI: 10.1016/j.ejor.2011.12.033
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221711011271
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2011.12.033?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sang-Hyun Kim & Morris A. Cohen & Serguei Netessine, 2007. "Performance Contracting in After-Sales Service Supply Chains," Management Science, INFORMS, vol. 53(12), pages 1843-1858, December.
    2. Lau, Hoong Chuin & Song, Huawei & See, Chuen Teck & Cheng, Siew Yen, 2006. "Evaluation of time-varying availability in multi-echelon spare parts systems with passivation," European Journal of Operational Research, Elsevier, vol. 170(1), pages 91-105, April.
    3. Kalchschmidt, Matteo & Zotteri, Giulio & Verganti, Roberto, 2003. "Inventory management in a multi-echelon spare parts supply chain," International Journal of Production Economics, Elsevier, vol. 81(1), pages 397-413, January.
    4. Rappold, James A. & Tchernev, Nikolay, 2009. "Special Issue on Supply Chain Design," European Journal of Operational Research, Elsevier, vol. 199(3), pages 732-733, December.
    5. Alfredsson, Patrik, 1997. "Optimization of multi-echelon repairable item inventory systems with simultaneous location of repair facilities," European Journal of Operational Research, Elsevier, vol. 99(3), pages 584-595, June.
    6. Stephen C. Graves, 1985. "A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment," Management Science, INFORMS, vol. 31(10), pages 1247-1256, October.
    7. Nadim E. Abboud & John N. Daigle, 1997. "A Little's Result Approach to the Service Constrained Spares Provisioning Problem for Repairable Items," Operations Research, INFORMS, vol. 45(4), pages 577-583, August.
    8. Margaret K. Schaefer, 1983. "A Multi-Item Maintenance Center Inventory Model for Low-Demand Reparable Items," Management Science, INFORMS, vol. 29(9), pages 1062-1068, September.
    9. John A. Muckstadt & L. Joseph Thomas, 1980. "Are Multi-Echelon Inventory Methods Worth Implementing in Systems with Low-Demand-Rate Items?," Management Science, INFORMS, vol. 26(5), pages 483-494, May.
    10. Craig C. Sherbrooke, 1968. "Metric: A Multi-Echelon Technique for Recoverable Item Control," Operations Research, INFORMS, vol. 16(1), pages 122-141, February.
    11. Wong, Hartanto & Cattrysse, Dirk & Van Oudheusden, Dirk, 2005. "Stocking decisions for repairable spare parts pooling in a multi-hub system," International Journal of Production Economics, Elsevier, vol. 93(1), pages 309-317, January.
    12. John A. Muckstadt, 1973. "A Model for a Multi-Item, Multi-Echelon, Multi-Indenture Inventory System," Management Science, INFORMS, vol. 20(4-Part-I), pages 472-481, December.
    13. B. L. Fox & D. M. Landi, 1970. "Searching for the Multiplier in One-Constraint Optimization Problems," Operations Research, INFORMS, vol. 18(2), pages 253-262, April.
    14. Caggiano, Kathryn E. & Jackson, Peter L. & Muckstadt, John A. & Rappold, James A., 2009. "Efficient computation of time-based customer service levels in a multi-item, multi-echelon supply chain: A practical approach for inventory optimization," European Journal of Operational Research, Elsevier, vol. 199(3), pages 744-749, December.
    15. Craig C. Sherbrooke, 1986. "VARI-METRIC : Improved Approximations for Multi-Indenture, Multi-Echelon Availability Models," Operations Research, INFORMS, vol. 34(2), pages 311-319, April.
    16. Hurlimann, Werner, 1988. "An elementary proof of the Adelson--Panjer recursion formula," Insurance: Mathematics and Economics, Elsevier, vol. 7(1), pages 39-40, January.
    17. D Nowicki & U D Kumar & H J Steudel & D Verma, 2008. "Spares provisioning under performance-based logistics contract: profit-centric approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(3), pages 342-352, March.
    18. Rappold, James A. & Van Roo, Ben D., 2009. "Designing multi-echelon service parts networks with finite repair capacity," European Journal of Operational Research, Elsevier, vol. 199(3), pages 781-792, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2013. "Multi-echelon, multi-indenture spare parts inventory control subject to system availability and budget constraints," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 95-101.
    2. Araceli Zavala & David Nowicki & Jose Emmanuel Ramirez-Marquez, 2019. "Quantitative metrics to analyze supply chain resilience and associated costs," Journal of Risk and Reliability, , vol. 233(2), pages 186-199, April.
    3. Riccardo Patriarca & Tianya Hu & Francesco Costantino & Giulio Di Gravio & Massimo Tronci, 2019. "A System-Approach for Recoverable Spare Parts Management Using the Discrete Weibull Distribution," Sustainability, MDPI, vol. 11(19), pages 1-15, September.
    4. Jan Block & Alireza Ahmadi & Xun Xiao & Uday Kumar, 2019. "Spares provisioning strategy for periodically replaced units within the fleet retirement period," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 10(3), pages 299-315, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    2. D Nowicki & U D Kumar & H J Steudel & D Verma, 2008. "Spares provisioning under performance-based logistics contract: profit-centric approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(3), pages 342-352, March.
    3. Mirzahosseinian, H. & Piplani, R., 2011. "A study of repairable parts inventory system operating under performance-based contract," European Journal of Operational Research, Elsevier, vol. 214(2), pages 256-261, October.
    4. Tsai, Shing Chih & Zheng, Ya-Xin, 2013. "A simulation optimization approach for a two-echelon inventory system with service level constraints," European Journal of Operational Research, Elsevier, vol. 229(2), pages 364-374.
    5. Qin, Xuwei & Jiang, Zhong-Zhong & Sun, Minghe & Tang, Liang & Liu, Xiaoran, 2021. "Repairable spare parts provisioning for multiregional expanding fleets of equipment under performance-based contracting," Omega, Elsevier, vol. 102(C).
    6. Qin, Xuwei & Shao, Lusheng & Jiang, Zhong-Zhong, 2020. "Contract design for equipment after-sales service with business interruption insurance," European Journal of Operational Research, Elsevier, vol. 284(1), pages 176-187.
    7. Sheikh-Zadeh, Alireza & Rossetti, Manuel D. & Scott, Marc A., 2021. "Performance-based inventory classification methods for large-Scale multi-echelon replenishment systems," Omega, Elsevier, vol. 101(C).
    8. Araceli Zavala & David Nowicki & Jose Emmanuel Ramirez-Marquez, 2019. "Quantitative metrics to analyze supply chain resilience and associated costs," Journal of Risk and Reliability, , vol. 233(2), pages 186-199, April.
    9. Guide, V. Daniel R. & Srivastava, Rajesh, 1997. "Repairable inventory theory: Models and applications," European Journal of Operational Research, Elsevier, vol. 102(1), pages 1-20, October.
    10. Ghaddar, Bissan & Sakr, Nizar & Asiedu, Yaw, 2016. "Spare parts stocking analysis using genetic programming," European Journal of Operational Research, Elsevier, vol. 252(1), pages 136-144.
    11. Izack Cohen & Morris A. Cohen & Elad Landau, 2017. "On sourcing and stocking policies in a two-echelon, multiple location, repairable parts supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(6), pages 617-629, June.
    12. Patriarca, Riccardo & Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2016. "Inventory optimization for a customer airline in a Performance Based Contract," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 206-216.
    13. Fritzsche, R., 2012. "Cost adjustment for single item pooling models using a dynamic failure rate: A calculation for the aircraft industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1065-1079.
    14. García-Benito, Juan Carlos & Martín-Peña, María-Luz, 2021. "A redistribution model with minimum backorders of spare parts: A proposal for the defence sector," European Journal of Operational Research, Elsevier, vol. 291(1), pages 178-193.
    15. R. Basten & M. Heijden & J. Schutten & E. Kutanoglu, 2015. "An approximate approach for the joint problem of level of repair analysis and spare parts stocking," Annals of Operations Research, Springer, vol. 224(1), pages 121-145, January.
    16. Hur, Mansik & Keskin, Burcu B. & Schmidt, Charles P., 2018. "End-of-life inventory control of aircraft spare parts under performance based logistics," International Journal of Production Economics, Elsevier, vol. 204(C), pages 186-203.
    17. Costantino, Francesco & Di Gravio, Giulio & Tronci, Massimo, 2013. "Multi-echelon, multi-indenture spare parts inventory control subject to system availability and budget constraints," Reliability Engineering and System Safety, Elsevier, vol. 119(C), pages 95-101.
    18. Basten, R.J.I. & van der Heijden, M.C. & Schutten, J.M.J., 2012. "Joint optimization of level of repair analysis and spare parts stocks," European Journal of Operational Research, Elsevier, vol. 222(3), pages 474-483.
    19. Diks, E. B. & de Kok, A. G. & Lagodimos, A. G., 1996. "Multi-echelon systems: A service measure perspective," European Journal of Operational Research, Elsevier, vol. 95(2), pages 241-263, December.
    20. Xie, Wei & Liao, Haitao & Jin, Tongdan, 2014. "Maximizing system availability through joint decision on component redundancy and spares inventory," European Journal of Operational Research, Elsevier, vol. 237(1), pages 164-176.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:219:y:2012:i:2:p:324-334. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.