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The Repair Kit Problem with positive replenishment lead times and fixed ordering costs

Prak, Dennis, Saccani, Nicola, Syntetos, Argyrios, Teunter, Ruud and Visintin, Filippo 2017. The Repair Kit Problem with positive replenishment lead times and fixed ordering costs. European Journal of Operational Research 261 (3) , pp. 893-902. 10.1016/j.ejor.2017.02.019

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The Repair Kit Problem (RKP) concerns the determination of a set of items taken by a service engineer to perform on-site product support. Such a set is called a kit. Models developed in the literature have always ignored the lead times associated with delivering items to replenish the kit, thereby limiting the practical relevance of the proposed solutions. Motivated by a real life case, we develop a model with positive lead times to control the replenishment quantities of the items in the kit, and study the performance of (s, S) policies under a service objective. The choice for (s, S) policies is made in order to accommodate fixed ordering costs. We present a method to calculate job fill rates with exact expressions, and discuss a heuristic approach to optimize the reorder level and order-up-to level for each item in the kit. The empirical utility of the model is assessed on real world data from an equipment manufacturer and useful insights are offered to after-sales managers.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Uncontrolled Keywords: OR in service industries; Inventory; Repair kit problem; Lead times; Service parts
Publisher: Elsevier
ISSN: 0377-2217
Date of First Compliant Deposit: 27 February 2017
Date of Acceptance: 14 February 2017
Last Modified: 29 Jun 2019 16:27

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