Supplier Selection for Spare Parts Supply Chain Networks

Abstract

Spare parts management encompasses all the spare parts decisions; thus, it has a significant impact on the company results. This paper studies the integration of supply chain network design and inventory control decisions into the spare parts management context. The paper presents a modelling structure that integrates supplier selection, warehouse location, consumption point assignments, and inventory control decisions in order to optimize the total system cost while satisfying the company requirements. Additionally, the proposed structure incorporates sourcing strategy selection (i.e. warehousing or cross-docking strategies). A decomposition-based solution strategy is proposed based on the Generalized Benders Decomposition approach. The modelling structure is specified considering an inventory control policy widely used in industrial sites. The proposed integrated approach is focused on supporting the decision-making process yielding a spare parts supply chain system performance improvement.