Multi-period Inventory Model of Substitutable Maintenance Spares Parts
Date Issued
2008
Date
2008
Author(s)
Lin, Ching-Fu
Abstract
After sales services is getting more and more important. Companies would face more competitive pressure as customer have started to value not only products itself but also after sales service, which also implies that after sales service have became a key factor to help companies get out of competition. This made companies cannot simply use traditional strategy like price competitive strategy to satisfy customer’s needs and further to form a competitive advantage. Therefore, companies have to make effort in finding out new ways to satisfy customer’s needs with competitive cost structure. Among all after sales contracts, the most common contract type in business world is the warranty and maintenance contracts which play a important role when customers choosing products. There is a way for maintenance service provider to cut down on the inventory costs and to reduce stock-out rate, which is exerting the product substitution on providing maintenance service. Thus, my study referred to not only related research of product substitution and warranty service contracts but also the maintenance practice of personal computer industry in Taiwan, to build a multi-period inventory model of substitutable maintenance spares parts, which minimize total costs of maintenance service providers. The study shows that how this model can benefit maintenance service providers by systematically deciding which type of maintenance spares parts can be substituted and the volumes of substitution. Besides, experiment analysis is used in the study to know how a demand pattern of spare parts and a limit purchase amount that maintenance service providers faced will affect substitution volume, the best substitutable spare parts bundle and the total cost of maintenance service providers. The study also builds a rolling schedule model based on the above-mentioned model to deal with market uncertainty issue. According to the analysis result, using downward substitution to spare parts can really save total cost and backorder cost, in particular under the circumstances that demand pattern of spare parts has higher variation and maintenance service providers have a limited purchase amount in warranty contract.
Subjects
Warranty and Maintenance Services
Product Substitution
Rolling schedule
Type
thesis
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ntu-97-R95741032-1.pdf
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