An exact solution procedure for multi-item two-echelon spare parts inventory control problem with batch ordering in the central warehouse

Authors:
Engin Topan;Z. Pelin BayıNdıR;Tarkan Tan
Affiliations:
Department of Industrial Engineering, Middle East Technical University, 06531 Ankara, Turkey and Department of Industrial Engineering, Çankaya University, Ankara, Turkey;Department of Industrial Engineering, Middle East Technical University, 06531 Ankara, Turkey;School of Industrial Engineering, Eindhoven University of Technology, Eindhoven, The Netherlands
Venue:
Operations Research Letters
Year:
2010

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Abstract

We consider a multi-item two-echelon inventory system in which the central warehouse operates under a (Q,R) policy, and the local warehouses implement basestock policy. An exact solution procedure is proposed to find the inventory control policy parameters that minimize the system-wide inventory holding and fixed ordering cost subject to an aggregate mean response time constraint at each facility.