An Inventory-Location Modeling Structure for Spare Parts Supply Chain Network Design Problems in Industrial End-User Sites

Abstract

Traditional literature on Spare Parts Management from industrial end-user sites has not focused on the underlying Supply Chain Network. Thus, this paper analyzes the relevance of integrating Supply Chain Network design with traditional Spare Parts Management. With this aim, the paper proposes a network optimization modeling structure, with simultaneous decisions for warehouse locations and inventory control, allowing to optimize the Spare Parts Supply Chain Network costs.The model is specified for three traditional and commonly used Inventory Control Policies suitable for a variety of Spare Parts (i.e., (s, Q), (R, s, S) and (S-1, S)). The proposed integrated approach yields Spare Parts Supply Chain system performance improvements.