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Replacement and inventory control for a multi-customer product service system with decreasing replacement costs
Liu, Xinbao1,3; Yang, Tianji1,2,3,4,5; Pei, Jun1,3; Liao, Haitao2; Pohl, Edward A.2
Corresponding AuthorYang, Tianji(yangtianji@sia.cn)
2019-03-01
Source PublicationEUROPEAN JOURNAL OF OPERATIONAL RESEARCH
ISSN0377-2217
Volume273Issue:2Pages:561-574
AbstractIn a Use-Oriented Product Service System, the customers pay for a particular service without owning the product, and the profitability of the service provider (usually also the owner of the product) is determined by the product availability and how replacement and inventory control are implemented. With the advances in modern sensor and wireless communication technologies, service providers can monitor the health status of each product in use and then conduct condition-based maintenance accordingly. Meanwhile, the waste of the remaining life of replaced products should also be considered in the system's operation due to the increasing concerns about environmental impact and lean production. To improve the profitability of a Use-Oriented Product Service System, we formulate a discrete-time Markov Decision Process that maximizes the long-term revenue per period. To overcome the computational challenge of this problem, we propose a sequential heuristic solution incorporating a heuristic replacement policy along with a heuristic inventory control approach to solve the integrated model. The heuristic replacement policy is derived from the optimal control policy for the subsystem of a single customer. The inventory control heuristic determines the target inventory level according to a one-period look-ahead myopic optimization policy. The performance of the proposed solution and some useful management insights are investigated in a numerical study. In addition, sensitivity analyses by varying the replacement costs, holding cost, unit service revenue and deterioration rates are also conducted. (C) 2018 Elsevier B.V. All rights reserved.
KeywordOR in service industries Production service system Replacement policies Inventory control
Funding OrganizationNational Key R&D Program of China ; National Natural Science Foundation of China ; Innovative Research Groups of the National Natural Science Foundation of China ; Humanities and Social Sciences Foundation of the Chinese Ministry of Education ; Anhui Province Natural Science Foundation ; China Scholarship Council (CSC) ; Open Research Fund Program of Key Laboratory of Process Optimization and Intelligent Decision-making (Hefei University of Technology), Chinese Ministry of Education
DOI10.1016/j.ejor.2018.08.029
Indexed BySCI
Language英语
Funding ProjectNational Key R&D Program of China[2018YFF0214704] ; National Natural Science Foundation of China[71601065] ; National Natural Science Foundation of China[71231004] ; National Natural Science Foundation of China[71690235] ; National Natural Science Foundation of China[71501058] ; National Natural Science Foundation of China[71671182] ; National Natural Science Foundation of China[71871080] ; Innovative Research Groups of the National Natural Science Foundation of China[71521001] ; Humanities and Social Sciences Foundation of the Chinese Ministry of Education[15YJC630097] ; Anhui Province Natural Science Foundation[1608085QG167] ; China Scholarship Council (CSC)[201606690008] ; Open Research Fund Program of Key Laboratory of Process Optimization and Intelligent Decision-making (Hefei University of Technology), Chinese Ministry of Education
WOS Research AreaBusiness & Economics ; Operations Research & Management Science
WOS SubjectManagement ; Operations Research & Management Science
WOS IDWOS:000452345600012
PublisherELSEVIER SCIENCE BV
Citation statistics
Cited Times:10[WOS]   [WOS Record]     [Related Records in WOS]
Document Type期刊论文
Identifierhttp://ir.imr.ac.cn/handle/321006/130762
Collection中国科学院金属研究所
Corresponding AuthorYang, Tianji
Affiliation1.Hefei Univ Technol, Sch Management, Hefei, Anhui, Peoples R China
2.Univ Arkansas, Dept Ind Engn, Fayetteville, AR 72701 USA
3.Minist Educ, Key Lab Proc Optimizat & Intelligent Decis Making, Hefei, Anhui, Peoples R China
4.Chinese Acad Sci, Shenyang Inst Automat, Shenyang, Liaoning, Peoples R China
5.Chinese Acad Sci, Inst Robot & Intelligent Mfg, Shenyang, Liaoning, Peoples R China
Recommended Citation
GB/T 7714
Liu, Xinbao,Yang, Tianji,Pei, Jun,et al. Replacement and inventory control for a multi-customer product service system with decreasing replacement costs[J]. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH,2019,273(2):561-574.
APA Liu, Xinbao,Yang, Tianji,Pei, Jun,Liao, Haitao,&Pohl, Edward A..(2019).Replacement and inventory control for a multi-customer product service system with decreasing replacement costs.EUROPEAN JOURNAL OF OPERATIONAL RESEARCH,273(2),561-574.
MLA Liu, Xinbao,et al."Replacement and inventory control for a multi-customer product service system with decreasing replacement costs".EUROPEAN JOURNAL OF OPERATIONAL RESEARCH 273.2(2019):561-574.
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