Inventory models for fast moving spare parts subject to “sudden death” obsolescence

Inventory models for fast moving spare parts subject to “sudden death” obsolescence Simple inventory models are developed for fast moving spare parts subject to the risk of unexpected, immediate obsolescence. The approach does not require a precise knowledge of the probability distribution of the moment of obsolescence, as is the case for models discussed in the literature. A rough estimate of the obsolescence risk for the next order cycle is sufficient. The models can be seen as extensions of the EOQ-formula. Following cases are studied: 1. 1. Constant obsolescence risk; no shortages allowed 2. 2. Varying obsolescence risk; no shortages allowed 3. 3. Varying obsolescence risk; shortages allowed It appears that the models are practicable and, in the proper circumstances, lead to a substantial reduction of cost. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Production Economics Elsevier

Inventory models for fast moving spare parts subject to “sudden death” obsolescence

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Publisher
Elsevier
Copyright
Copyright © 1996 Elsevier Ltd
ISSN
0925-5273
eISSN
1873-7579
DOI
10.1016/0925-5273(96)00062-X
Publisher site
See Article on Publisher Site

Abstract

Simple inventory models are developed for fast moving spare parts subject to the risk of unexpected, immediate obsolescence. The approach does not require a precise knowledge of the probability distribution of the moment of obsolescence, as is the case for models discussed in the literature. A rough estimate of the obsolescence risk for the next order cycle is sufficient. The models can be seen as extensions of the EOQ-formula. Following cases are studied: 1. 1. Constant obsolescence risk; no shortages allowed 2. 2. Varying obsolescence risk; no shortages allowed 3. 3. Varying obsolescence risk; shortages allowed It appears that the models are practicable and, in the proper circumstances, lead to a substantial reduction of cost.

Journal

International Journal of Production EconomicsElsevier

Published: Jul 1, 1996

References

  • A note on the effect of sudden obsolescence on the optimal lot size
    Masters, J.

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