Academic journal article Indian Journal of Economics and Business

Closed Loop Repairable Parts Inventory System: A Literature Review

Academic journal article Indian Journal of Economics and Business

Closed Loop Repairable Parts Inventory System: A Literature Review

Article excerpt


The paper reviews published literature related to multi--echelon inventory models for repairable items. Our objective is to understand the existing analytical models and their application in the context of the management of spare parts where repair facilities are resource--constrained. The focus of the review is restricted to the models which are suitable for practical application. A variety of models applicable to multi echelon inventory system are reviewed and the Multi--Echelon Technique for Recoverable Item Control (METRIC) model and its variations, Level of Repair Analysis (LORA) are described. Taxonomy, showing the current position in the context of the existing research is also presented.

Keywords: Repairable Parts Inventory System; Multi--Echelon Technique for Recoverable Item Control; queuing models; Level-of-Repair Analysis (LORA)

JEL codes: MO11; N60; G31


Repairable part inventories are particularly expensive parts of the machines which are normally repaired and replaced for the smooth working of the machines. Here failed inventory of items may go through a transformation, termed in general as repairs but the inventory is neither lost nor produced. Failure events drive the demand and dynamics in repairable item multi--echelon models. The inventory position of repairable part inventory is governed by the repair capacity which is normally assumed to be constant, repair time and number of back orders of the parts as against the finished product inventories or work in process whose stock levels are governed by production capacities and demand uncertainty and increased or decreased accordingly. Further, in addition to a small local repair activities, the members of these supply chain pools the repair activities and the spare parts to a single location for mutual benefits.

The variations in the inventory policies motivated the authors to further understand the modeling efforts done in this area and present the related unaddressed issues. There are few studies that summarise this work namely Pierskalla and Voelker [1976]; Nahmias [1981]; Guide Jr. and Srivastava [1997] and Kennedy et al. [2002]. The most recent was in 2002, hence, there is a need to update these discussions and present the gaps in the present literature.

We first categorized the literature into three categories, providing an overview of the related literature till 2002 in the first phase. In the second phase, an attempt is made to classify the related literature published till date. Parameters like solution methodology (exact or approximate), inventory policy, underlined model (deterministic or stochastic) and variations/ modifications are used for the classification purpose.

The objectives of the study are to present the published literature in above categories and provide the Taxonomy. More specifically the study will try to answer the following question related to Repairable Parts Inventory System:

(a) How has the present literature related to multi--echelon repairable parts inventory systems classified?

(b) What are the features, applications and limitations of each of these categories?

(c) Which solution methods are used in each of these categories? What types of models are used for repairable parts inventory?

(d) What are the applications of the models pertaining to repairable parts inventory systems?

This review will be a ready reference to the researcher and decision makers working in industries with heavy utilization of equipments like Chemical processing industries, Petrochemical industries, Defense systems, Mass transit systems such as airlines, Road transport etc. It will be helpful in finding the better inventory policy parameters and options/alternatives thereof, in assisting the managerial decision making for purchase of repairable items and in determining the capacity requirements at the base and depots. …

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