A heuristic to minimize the inventory value of repairable parts with service constraints: Application to an airline company

Abstract: This paper focuses on the improvement of the inventory management of repairable parts of the airline company Air Nostrum. The company uses a common sales replacement policy to manage their repairable parts and the same target fill rate for every item. This target is very high in order to assure a high availability of the aircrafts, dealing also to a high inventory value.
Design/methodology/approach: However, this paper shows that an alternative heuristic approach outperforms the previous one terms of inventory value while fulfilling the target fill rate.
Findings and Originality/value: This improvement is illustrated with an extensive and real dataset and may lead to a significant inventory reduction.
Originality/value: Therefore, a company can design its inventory policies applying this heuristic focused on inventory reduction with a service level constraint instead of the usual cost optimization or service level fulfillment.
Keywords: inventory management, airline industry, ABC classification
Author: Manuel Cardós, Eugenia Babiloni, Marta E. Palmer, Ester Guijarro
Journal Code: jptindustrigg130037

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