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The final order problem for repairable spare parts under condemnation

Author

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  • J P J van Kooten

    (Technische Universiteit Eindhoven)

  • T Tan

    (Technische Universiteit Eindhoven)

Abstract

We consider a manufacturer of complex machines that offers service contracts to her customers, committing herself to repair failed spare parts throughout a fixed service period. The suppliers of spare parts often discontinue the production of some parts as technology advances and ask the manufacturer to place a final order. We address the problem of determining final orders for such spare parts. The parts that we consider are repairable, but they are subject to the risk of condemnation. We build a transient Markovian model to represent the problem for a repairable spare part with a certain repair probability and repair lead time and we present some approximations that allow for further real-life characteristics to be included. Furthermore, an approximate model that can be computed more efficiently is presented, and the sensitivity of the results obtained with respect to the problem parameters is discussed, helping us develop several managerial insights.

Suggested Citation

  • J P J van Kooten & T Tan, 2009. "The final order problem for repairable spare parts under condemnation," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(10), pages 1449-1461, October.
    • Handle: RePEc:pal:jorsoc:v:60:y:2009:i:10:d:10.1057_jors.2008.111
    DOI: 10.1057/jors.2008.111
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    References listed on IDEAS

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    Cited by:

    1. Karl Inderfurth & Rainer Kleber, 2010. "An Advanced Heuristic for Multiple-Option Spare Parts Procurement after End-of-Production," FEMM Working Papers 100005, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    2. Behfard, S. & van der Heijden, M.C. & Al Hanbali, A. & Zijm, W.H.M., 2015. "Last time buy and repair decisions for spare parts," European Journal of Operational Research, Elsevier, vol. 244(2), pages 498-510.
    3. Pinçe, Çerag & Dekker, Rommert, 2011. "An inventory model for slow moving items subject to obsolescence," European Journal of Operational Research, Elsevier, vol. 213(1), pages 83-95, August.
    4. Shen, Yuelin & Willems, Sean P., 2014. "Modeling sourcing strategies to mitigate part obsolescence," European Journal of Operational Research, Elsevier, vol. 236(2), pages 522-533.
    5. M. Pourakbar & E. Laan & R. Dekker, 2014. "End-of-Life Inventory Problem with Phaseout Returns," Production and Operations Management, Production and Operations Management Society, vol. 23(9), pages 1561-1576, September.
    6. J. B. G. Frenk & Canan Pehlivan & Semih O. Sezer, 2019. "Order and exit decisions under non-increasing price curves for products with short life cycles," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 90(3), pages 365-397, December.
    7. van Jaarsveld, Willem & Dekker, Rommert, 2011. "Estimating obsolescence risk from demand data to enhance inventory control--A case study," International Journal of Production Economics, Elsevier, vol. 133(1), pages 423-431, September.
    8. Hu, Qiwei & Boylan, John E. & Chen, Huijing & Labib, Ashraf, 2018. "OR in spare parts management: A review," European Journal of Operational Research, Elsevier, vol. 266(2), pages 395-414.
    9. Ozyoruk, Emin & Erkip, Nesim Kohen & Ararat, Çağın, 2022. "End-of-life inventory management problem: Results and insights," International Journal of Production Economics, Elsevier, vol. 243(C).
    10. J. B. G. Frenk & Sonya Javadi & Semih O. Sezer, 2019. "An optimal stopping approach for the end-of-life inventory problem," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 90(3), pages 329-363, December.
    11. Pourakbar, Morteza & Dekker, Rommert, 2012. "Customer differentiated end-of-life inventory problem," European Journal of Operational Research, Elsevier, vol. 222(1), pages 44-53.
    12. Frenk, J.B.G. & Javadi, S. & Pourakbar, M. & Sezer, S.O., 2019. "An exact static solution approach for the service parts end-of-life inventory problem," European Journal of Operational Research, Elsevier, vol. 272(2), pages 496-504.
    13. 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.
    14. Behfard, S. & Al Hanbali, A. & van der Heijden, M.C. & Zijm, W.H.M., 2018. "Last Time Buy and repair decisions for fast moving parts," International Journal of Production Economics, Elsevier, vol. 197(C), pages 158-173.

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