The impact of aggregation level on lumpy demand management
Spare parts management is a rather complex issue. One of the reasons of its complexity is the lumpy pattern of the demand that spare parts frequently present. Several methods have been proposed to cope with this particular kind of problem and improvements have been proved compared to classical forecasting techniques. Literature has however devoted minor attention to the choice of aggregation level when demand is lumpy. This paper aims at studying whether aggregating data when demand is lumpy may be beneficial in terms of impact on inventory performances. An installation stock inventory model is considered and aggregation over time is taken into account; in particular for a single item different time buckets are considered and performances are evaluated in terms of service and inventory level. Based on simulation experiments on real demand data coming from the spare parts unit of a multinational white goods manufacturer, we identify that aggregation of data can significantly impact on inventory management performances. A contingency analysis based on demand characteristics allows us to draw some guidelines on when aggregation over time can be beneficial.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: viale Marconi 5, 24044 Dalmine|
Web page: http://www.unibg.it/struttura/en_struttura.asp?cerca=en_dige_intro
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:brh:wpaper:0911. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (University of Bergamo Library)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.