Stock-out policies of a spare-parts warehouse for a multi-item repairable system

In industrial settings, the management of spare-parts inventory can have a significant impact on the system's reliability and profitability. In this paper, we provide a framework that jointly optimises reliability of a multi-item system and the management of an accompanying spare-parts warehouse (SPW) with a finite capacity. Consider a system with N items that operate in parallel and have random life spans; when an item breaks, it is replaced by a spare part (if available) with no time. The SPW is managed according to a continuous-review $ (S,s) $ (S,s) policy. That is, when the number of spare parts drops to level $ 0\leq s \lt S $ 0≤s<S, an order is placed to replenish the warehouse to level S after a random lead time. When a spare part is unavailable, the company chooses between two stockout policies: a cold standby policy or an emergency supply policy. Using the matrix-geometric method for phase-type distributions, we derive the optimal thresholds minimising the expected discounted total cost (including replacement, replenishment, maintenance, downtime, and emergency supply costs). Using a numerical study, we compare the policies and provide managerial insights. For example, we show that an emergency supply policy may yield a significant cost reduction, particularly for high maintenance cost and long lead times.

• Publication year

  2025

• Venue

  International Journal of Production Research

• Publication date

  2025-06-30

• Fields of study

  Business, Engineering, Computer Science

• Identifiers
  DOI 10.1080/00207543.2025.2524761
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Hierarchical production control and distribution planning under retail uncertainty with reinforcement learning

  2025cited by this paper
• Performance of deep reinforcement learning algorithms in two-echelon inventory control systems

  2024cited by this paper
• Generative artificial intelligence in supply chain and operations management: a capability-based framework for analysis and implementation

  2024cited by this paper
• Spare parts management in industry 4.0 era: a literature review

  2024cited by this paper
• Joint maintenance and spare-parts inventory models: a review and discussion of practical stock-keeping rules

  2023cited by this paper
• A planning model for repairable spare part supply chain considering stochastic demand and backorder: an empirical investigation

  2023cited by this paper
• Hybrid opportunistic maintenance policy for serial-parallel multi-station manufacturing systems with spare part overlap

  2023cited by this paper
• Joint Optimization of Preventive Maintenance and Spare Parts Ordering Considering Imperfect Detection

  2023cited by this paper
• Optimal N-policy for the maintenance of k-out-of-n systems with dynamic minor repairs considering second-hand component income

  2022cited by this paper
• Spare part segmentation for additive manufacturing - A framework

  2022cited by this paper
• A review on reinforcement learning algorithms and applications in supply chain management

  2022cited by this paper
• Multi-Period Spare Parts Supply Chain Network Optimization under (T, s, S) Inventory Control Policy with Improved Dynamic Particle Swarm Optimization

  2022cited by this paper
• Condition-based critical level policy for spare parts inventory management

  2021cited by this paper
• Location and two-echelon inventory network design with economies and diseconomies of scale in facility operating costs

  2021cited by this paper
• The continuous (S, s, Se) inventory model with dual sourcing and emergency orders

  2021cited by this paper
• Critical project planning and spare parts inventory management in shutdown maintenance

  2021cited by this paper
• Spare Parts Inventory Management In the Warehouse: A Lean Approach

  2021cited by this paper
• The Asymptotic Behavior of the Optimal Cash Holding Strategy Under a Class of Utility Functions

  2021cited by this paper
• Identifying DMSMS availability risk at the system level

  2020cited by this paper
• Maintenance policies with minimal repair and replacement on failures: analysis and comparison

  2020cited by this paper
• A review of operational spare parts service logistics in service control towers

  2019cited by this paper
• Emergency supply contracts for a service provider with limited local resources

  2019cited by this paper
• The impact of an emergency warehouse in a two-echelon spare parts network

  2019cited by this paper
• System dynamics simulation-based model for coordination of a three-level spare parts supply chain

  2019cited by this paper
• Age replacement policy in the case of no data: the effect of Weibull parameter estimation

  2019cited by this paper
• Functions

  2018cited by this paper
• Age-based inventory control in a multi-echelon system with emergency replenishments

  2018cited by this paper
• Optimal age replacement scheduling for a random work system with random lead time

  2018cited by this paper
• Group maintenance policies for an R-out-of-N system with phase-type distribution

  2018cited by this paper
• On the benefit of dual-sourcing in managing perishable inventory

  2018cited by this paper
• Alternative utility functions: review, analysis and comparison

  2018cited by this paper
• Critical level policy for a production-inventory model with lost sales

  2018cited by this paper
• Classification methodology for spare parts management combining maintenance and logistics perspectives

  2018cited by this paper
• Application of Q-R Policy for Non-smooth Demand in the Aviation Industry

  2018cited by this paper
• Pricing decisions for short life-cycle product in a closed-loop supply chain with random yield and random demands

  2018cited by this paper
• Shortage decision policies for a fluid production model with MAP arrivals

  2017cited by this paper
• Reducing emissions in transportation and inventory management: (R, Q) Policy with considerations of carbon reduction

  2017cited by this paper
• Spare parts inventory management: New evidence from distribution fitting

  2017cited by this paper
• Mass Customizing Spare Parts Support Services Based on Response Time With Inventory Pooling Strategies

  2016cited by this paper
• Complex multi-state systems modelled through marked Markovian arrival processes

  2016cited by this paper
• A TWO-ECHELON SPARE PARTS NETWORK WITH LATERAL AND EMERGENCY SHIPMENTS: A PRODUCT-FORM APPROXIMATION

  2016cited by this paper
• Optimal Policies for a Dual-Sourcing Inventory Problem with Endogenous Stochastic Lead Times

  2016influential reference
• Group replacement policies for a repairable cold standby system with fixed lead times

  2015cited by this paper
• Inventory Control in a Spare Parts Distribution System with Emergency Stocks and Pipeline Information

  2015cited by this paper
• Analysis Research on the Lateral Replenishment Strategy of the Chain Supermarket Fresh Agricultural Products

  2015cited by this paper
• Inventory management of spare parts in an energy company

  2015cited by this paper
• A prognostics-based spare part ordering and system replacement policy for a deteriorating system subjected to a random lead time

  2015cited by this paper
• Availability optimisation for stochastic degrading systems under imperfect preventive maintenance

  2014cited by this paper
• An adaptive base stock policy for repairable item inventory control

  2013cited by this paper
• Optimal allocation policy for a multi-location inventory system with a quick response warehouse

  2013cited by this paper
• A Base Stock Inventory Management System for Intermittent Spare Parts

  2013cited by this paper
• Unavailability and spurious operation probability of k-out-of-n reactor protection systems in consideration of CCF

  2012cited by this paper
• SPARE PARTS CLASSIFICATION AND INVENTORY MANAGEMENT: A CASE STUDY

  2012cited by this paper
• Inventories with Multiple Supply Sources and Networks of Queues with Overflow Bypasses

  2009cited by this paper
• A condition-based replacement and spare provisioning policy for deteriorating systems with uncertain deterioration to failure

  2009cited by this paper
• An optimum condition‐based replacement and spare provisioning policy based on Markov chains

  2008cited by this paper
• Joint Optimization of Condition-Based Preventive Maintenance and Spare Ordering Policy

  2008cited by this paper
• Two-echelon multi-item spare parts systems with emergency supply flexibility and waiting time constraints

  2007cited by this paper
• Analysis of R out of N systems with several repairmen, exponential life times and phase type repair times: An algorithmic approach

  2006cited by this paper
• Optimal Reliability Modeling: Principles and Applications

  2004cited by this paper
• The analytic hierarchy process applied to maintenance strategy selection

  2000cited by this paper
• Matrix‐analytic Models and their Analysis

  2000cited by this paper
• Introduction to Matrix Analytic Methods in Stochastic Modeling

  1999influential reference
• CONTINUOUS REVIEW CYCLIC INVENTORY MODELS WITH EMERGENCY ORDER

  1995cited by this paper
• An (S - 1, S) Inventory System with Emergency Orders

  1991cited by this paper
• Matrix-geometric solutions in stochastic models - an algorithmic approach

  1982influential reference
• Asymptotic behavior of the stationary distributions in the GI/PH/c queue with heterogeneous servers

  1981influential reference

• Reliability-Based Joint Optimization of Self-Healing Resource and Maintenance Policy for Systems in a Multisource Shock Environment

  2026cites this paper
• Simheuristics with metamodel initialization for determining repair system inventory policies

  2026cites this paper
• An Empirical Data Model for Spare Parts Management: Linking Maintenance, Logistics, Inventory, and Equipment Data to Bridge Information Silos and Reduce Data-Gathering Efforts

  2025cites this paper