A decision support system for two-echelon service supply chains

Abstract

In this paper, we provide a decision support system for a two-echelon spare parts inventory distribution system that consists of a single central warehouse and a local warehouse. These warehouses are organized as separate entities that make their individual spare parts inventory provisioning decisions independently. The goal is to minimize the total backorders seen by the local warehouse such that the total inventory investment does not exceed a given budget. We provide a decision support system that can be used to coordinate these warehouses in a way to reach this goal. We used a real-life case data obtained from an original equipment manufacturer located in Europe and provided numerical results. © 2020 Elsevier B.V., All rights reserved.