Modeling repair demand in existence of a nonstationary installed base
Yükleniyor...
Tarih
2023-09
Yazarlar
Dergi Başlığı
Dergi ISSN
Cilt Başlığı
Yayıncı
Elsevier B.V.
Erişim Hakkı
info:eu-repo/semantics/closedAccess
Özet
Life cycles of products consist of 3 phases, namely growth, maturity, and decline phases. Modeling repair demand is particularly difficult in the growth and decline stages due to nonstationarity. In this study, we suggest respective stochastic models that capture the dynamics of repair demand in these two phases. We apply our theory to two different operations management problems. First, using the moments of spare parts demand, we suggest an algorithm that selects a parametric distribution from the hypergeometric family (Ord, 1967) for each period in time. We utilize the algorithm in a single echelon inventory control problem. Second, we focus on investment decisions of Original Equipment Manufacturers (OEMs) to extend economic lifetimes of products with technology upgrades. Our results indicate that the second moment is sufficient for growing customer bases, whereas using the third moment doubles the approximation quality of theoretical distributions for a declining customer base. From a cost minimization perspective, using higher moments of demand leads to savings up to 13.6% compared to the single-moment approach. Also, we characterize the optimal investment policy for lifetime extension decisions from risk-neutral and risk-averse perspectives. We find that there exists a critical level of investment cost and installed base size for profitability of lifetime extension for OEMs. From a managerial point of view, we find that a risk-neutral decision maker finds the lifetime extension problem profitable. In contrast, even a slight risk aversion can make the lifetime extension decision economically undesirable.
Açıklama
This research is funded by TUBITAK 3501 National Young Researchers Career Development Program with the grant number 118M477 . Authors are thankful to Ali Kök for his help in organizing our code base that we use in our numerical experiments.
Anahtar Kelimeler
Installed base, Inventory theory and control, Nonstationary demand, Spare parts, Stochastic methods, Decision making, Inventory control, Investments, Life cycle, Profitability, Repair, Stochastic control systems, Stochastic systems, Customerbase, Inventory theory, Lifetime extension, Model repair, Non-stationary demand, Original equipment manufacturers, Spare parts logistics, Inventory control, Stock control, Upgradability, Information, System
Kaynak
International Journal of Production Economics
WoS Q Değeri
Q1
Scopus Q Değeri
Q1
Cilt
263
Sayı
Künye
Hekimoğlu, M. & Karlı, D. (2023). Modeling repair demand in existence of a nonstationary installed base. International Journal of Production Economics, 263, 1-13. doi:10.1016/j.ijpe.2023.108923
