Improving spare parts management for field services. A model and a case study for the repair kit problem

The Repair Kit Problem is about determining the stock of service parts carried by field service engineers for on-site product support. Models that optimise cost or service performances have appeared in the literature, but two important managerial decisions have not received enough attention. They are the maximum amount of stock to be carried on the vehicle (referred to as inventory budget) and the number of times per week the repair kit should be restocked (replenishment frequency). In this paper we propose a solution method based on the sequential use of optimization and simulation that addresses these issues. The application study was inspired by a real case of an equipment provider and tested on real data. The method allows defining the repair kit and assessing the impact on the overall cost of combinations of inventory budget and replenishment frequency values. The proposed method aims at improving the managerial understanding on how these decisions interact and at bridging a literature gap. In particular, it supports managers in (i) defining the Repair Kit to be carried by each Service Engineer; (ii) identifying the levels of inventory budget and replenishment frequency minimising the overall cost in correspondence of different combinations of exogenous (cost) parameters