A network approach to modeling the multi-echelon spare-part inventory system with backorders and interval-valued demand

Eugene Levner, Yael Perlman, T. C.E. Cheng, Ilya Levner

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

Abstract

A multi-echelon inventory system implies the existence of a hierarchy of stocking locations, and the dependence and interaction between them. We consider a multi-echelon, spare-part inventory management problem with outsourcing and backordering. The problem is characterized by deterministic repair time/cost, and supply and demand that lie within prescribed intervals and that vary over time. The objective is to minimize the total inventory and transportation costs. We develop a network model for problem analysis and present a network flow algorithm for solving the problem. We prove that the WagnerWhitin property, known for the lot-sizing problem, can be extended to the spare-part inventory management problem under study.

Original languageEnglish
Pages (from-to)43-51
Number of pages9
JournalInternational Journal of Production Economics
Volume132
Issue number1
DOIs
StatePublished - Jul 2011

Bibliographical note

Funding Information:
We are grateful to two anonymous referees for their helpful comments on an earlier version of our paper. Cheng was supported in part by the Logistics Research Center of The Hong Kong Polytechnic University .

Keywords

  • Backorders
  • Multi-suppliers
  • Network flow algorithm
  • Network model
  • Spare-part inventory management
  • WagnerWhitin property

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