Spare parts inventory pooling games

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Abstract

We study a situation where n independent companies separately stock spare parts of the same item for a technically advanced machine. They may reduce expected joint holding and downtime costs by pooling inventory. We analyze these situations by defining a cooperative cost game. We examine the conditions under which such a game has a nonempty core, i.e. a stable cost allocation exists. For situations allowing companies to have non-identical demand rates and base stock levels and for situations allowing companies to have non-identical downtime costs, we show that the core of the associated game is non-empty. However, when companies have non- identical downtime costs along with non-identical base stock levels or demand rates, the associated game may have an empty core.
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages25
Publication statusPublished - 2009

Publication series

NameBETA publicatie : working papers
Volume300
ISSN (Print)1386-9213

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  • Cite this

    Karsten, F. J. P., Slikker, M., & Houtum, van, G. J. J. A. N. (2009). Spare parts inventory pooling games. (BETA publicatie : working papers; Vol. 300). Technische Universiteit Eindhoven.