Efficient heuristics for two-echelon spare parts inventory systems with an aggregate mean waiting time constraint per local warehouse

H. Wong, A.A. Kranenburg, G.J.J.A.N. Houtum, van, D. Cattrysse

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Abstract

This paper presents solution procedures for determining close-to-optimal stocking policies in a multi-item two-echelon spare parts inventory system. The system we consider consists of a central warehouse and a number of local warehouses, and there is a target for the aggregate mean waiting time per local warehouse. We develop four different heuristics and derive a lower bound on the optimal total cost. The effectiveness of each heuristic is assessed by measuring the relative gap between the heuristic’s total cost and the lower bound. The results of the computational experiments show that a greedy procedure performs most satisfactorily. It is accurate as indicated by relatively small gaps, easy to implement, and furthermore, the computational requirements are limited. The computational efficiency can be increased by using Graves’ approximate evaluation method instead of an exact evaluation method, while the results remain accurate.
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages23
ISBN (Print)90-386-0536-6
Publication statusPublished - 2005

Publication series

NameBETA publicatie : working papers
Volume149
ISSN (Print)1386-9213

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