A Sustainable EOQ Model for Repairable Spare Parts Under Uncertain Demand

Abstract: Many contributions could be found in scientific literature about logistics and inventory management of spare parts, but there is a lack of attention on the sustainable issues. This paper investigates how the single-product replenishment problem can be formulated and solved including sustainable concerns in the inventory model. The problem has been studied in case of stochastic variability of the consumption rate of repairable spare parts. The optimal order quantity is derived by minimising a sustainable logistic cost function in which economic and environmental costs of both the options of repairing and purchasing new spare parts are considered. Traditional logistic costs of spare parts (purchase, ordering, transport, holding and repair) as well as environmental costs due to transport, production, and disposal of replaced ones are considered. Furthermore, since demand of spare parts is uncertain and assumed to be an independent stochastic variable in each period of the supply lead time, shortage costs due to stock out events are considered. The optimal means of transport, the optimal repair policy, as well as the corresponding optimal value of the sustainable economic order quantity (SOQ) are calculated. A numerical example derived from field industrial data is presented to test the model capabilities. Results are discussed and compared with classical EOQ model solutions