Joint Inventory and Scheduling Control in a Repair Facility

Abstract

Operations Management in a Repair Facility Capital goods are machines or products that are used in the production of goods or service deliveries. Maintenance service providers keep spare parts on stock so that, whenever a critical component of a capital good breaks down, the broken part is replaced with a spare part to prevent long and costly downtime. In “Joint Inventory and Scheduling Control in a Repair Facility,” Özkan and van Houtum study inventory and repair scheduling decisions of a maintenance service provider for repairable capital goods. In case of a stock-out, the service provider should decide whether to back-order the demand or execute an emergency repair, which is an urgent but expensive repair operation for a broken part. The authors derive a simple and intuitive decision rule stating if the emergency repairs are necessary to achieve a close-to-optimal system performance. Moreover, they propose a simple, intuitive, and easy-to-implement heuristic control policy that performs well in numerical experiments.