Spare parts inventory management for substitute consumer durable products under uncertainties

Abstract

In this thesis, we investigate the mathematical models based on adaptive robust optimization (ARO) and stochastic programming (SP) for the spare parts inventory management under various uncertainties in a multi-period planning horizon, especially for the substitute consumer durable products offered in an assortment. In the first part of the thesis, we present a comprehensive literature review of spare parts inventory management, and 142 papers are surveyed and classified. In the second part, we consider a multi-period spare parts inventory system providing spare parts for the substitute products in an assortment and aim to develop the spare parts inventory policies when the assortment is given in advance and there are uncertainties in the failure rates of both products and spare parts. We formulate a multi-stage adaptive mixed-integer robust optimization model and improve the partition-and-bound method to solve it. In the third part, we consider a multi-period dynamic assortment planning problem for an original equipment manufacturer (OEM) who launches and sells substitute product variants through an online platform. To handle the uncertainties embedded in the customer preferences estimation, a multi-stage stochastic programming model is proposed, and a branch-and-price (B&P) algorithm is designed based on the block-angular structure of the model. In the last part of this thesis, we study an assortment planning problem from the product lifecycle perspective and intend to simultaneously determine the assortment decisions, spare parts inventory policies, and returned products remanufacturing decisions when there are uncertainties in the failure rates of products and spare parts, and the return rates of the used products. The aim of this part is to explore the impacts on product assortment decisions brought about by implementing the last time buy (LTB) and remanufacturing strategies to supply spare parts over the warranty periods.