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Decision support for spare parts acquisition in post product life cycle

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  • Karl Inderfurth

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  • Kampan Mukherjee

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Abstract

A major task in service management is the timely and cost efficient provision of spare parts for durable products. This especially holds good, when the regular production of the product, its components and parts has been discontinued, but customer service still has to be guaranteed for quite a long time. In such post product life cycle period, three options are available to organize the spare parts acquisition, namely (i) setting up a single large order within the final lot of regular production, (ii) performing extra production runs until the end of service and (iii) using remanufacturing to gain spare parts from used products. These three options are characterized by different cost and flexibility properties. Due to the time-variability and uncertainty of demands for spare parts and also that of the returns of used products, it is a challenging task to find out the optimal combination of these three options. In this paper we show how this problem can be modeled and solved by Decision Tree and stochastic Dynamic Programming procedure. Based on the Dynamic Programming approach a heuristic method is proposed, which can be employed to come up with a simple solution procedure for real-world spare parts acquisition problems during the post product life cycle. A numerical example is presented to demonstrate the application of the solution methods described in the paper. Copyright Springer-Verlag 2008

Suggested Citation

  • Karl Inderfurth & Kampan Mukherjee, 2008. "Decision support for spare parts acquisition in post product life cycle," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 16(1), pages 17-42, March.
  • Handle: RePEc:spr:cejnor:v:16:y:2008:i:1:p:17-42
    DOI: 10.1007/s10100-007-0041-z
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    References listed on IDEAS

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    1. Diaz, Angel & Fu, Michael C., 1997. "Models for multi-echelon repairable item inventory systems with limited repair capacity," European Journal of Operational Research, Elsevier, vol. 97(3), pages 480-492, March.
    2. Teunter, Ruud H. & Fortuin, Leonard, 1999. "End-of-life service," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 487-497, March.
    3. Teunter, Ruud H. & Fortuin, Leonard, 1998. "End-of-life service: A case study," European Journal of Operational Research, Elsevier, vol. 107(1), pages 19-34, May.
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    Citations

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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. van der Heijden, Matthieu & Iskandar, Bermawi P., 2013. "Last time buy decisions for products sold under warranty," European Journal of Operational Research, Elsevier, vol. 224(2), pages 302-312.
    3. repec:eee:ejores:v:266:y:2018:i:2:p:395-414 is not listed on IDEAS
    4. Kleber, Rainer & Zanoni, Simone & Zavanella, Lucio, 2011. "On how buyback and remanufacturing strategies affect the profitability of spare parts supply chains," International Journal of Production Economics, Elsevier, vol. 133(1), pages 135-142, September.
    5. Kim, T.Y. & Dekker, R. & Heij, C., 2016. "Spare part demand forecasting for consumer goods using installed base information," Econometric Institute Research Papers EI2016-11, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    6. Rainer Kleber & Tobias Schulz & Guido Voigt, 2009. "Dynamic buy-back for product recovery in end-of-life spare parts procurement," FEMM Working Papers 09026, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    7. Dekker, Rommert & Pinçe, Çerağ & Zuidwijk, Rob & Jalil, Muhammad Naiman, 2013. "On the use of installed base information for spare parts logistics: A review of ideas and industry practice," International Journal of Production Economics, Elsevier, vol. 143(2), pages 536-545.

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