Network Design and Inventory Optimization

Shrinking profit margins in the high technology
industry has led companies to attempt to increase
profits through an increased focus on after-market
services. As part of that effort, service parts
logistics, which manages the post-sales distribution
of spare parts needed to maintain and repair products
in use, has gained importance. In an effort to
improve Service Parts Logistics (SPL) operations, we
integrate facility location and inventory stocking
decisions while classifying facilities based on their
assignment; dedicated facilities that are assigned
solely to individual customers (located on-site of
the customer, serving only that customer), and shared
facilities that are assigned to a subset of customers.

The high cost of spare parts motivates inventory
sharing, and dedicated facilities are required by
high priority customers such as hospitals, airports,
etc. because they do not accept stock-outs or long
lead times.

Our objective is to identify the optimal shared and
dedicated facilities to be opened and stocked subject
to time based service level constraints.

Autorentext

Dr. Ilyas Iyoob is currently an Operations Research Scientist atChainOpt Solutions in Austin, Texas. This book is based on hisresearch for his doctoral degree in operations research, whichwas awarded to him by the University of Texas at Austin.

Klappentext

Shrinking profit margins in the high technologyindustry has led companies to attempt to increaseprofits through an increased focus on after-marketservices. As part of that effort, service partslogistics, which manages the post-sales distributionof spare parts needed to maintain and repair productsin use, has gained importance. In an effort toimprove Service Parts Logistics (SPL) operations, weintegrate facility location and inventory stockingdecisions while classifying facilities based on theirassignment; dedicated facilities that are assignedsolely to individual customers (located on-site ofthe customer, serving only that customer), and sharedfacilities that are assigned to a subset of customers.The high cost of spare parts motivates inventorysharing, and dedicated facilities are required byhigh priority customers such as hospitals, airports,etc. because they do not accept stock-outs or longlead times.Our objective is to identify the optimal shared anddedicated facilities to be opened and stocked subjectto time based service level constraints.