Improved Dynamic Spare Parts Inventory Control Considering Turnover Rate and Two Types of Lead Time

This paper studies the inventory control strategy for equipment spare parts with huge shortage losses and rolling demand forecasts. A dynamic (t, Q t) strategy considering ordering costs and the turnover rate is proposed to reduce costs and improve the turnover rate while meeting a certain fill rate. This strategy constructs models under two scenarios where the lead time is shorter or longer than the planning horizon. Improvements by using safety stock and safety time have been introduced based on the models to deal with demand fluctuation. The effect of the strategies is verified by the real data of Wuhan Cigarette Factory which belongs to China Tobacco Hubei. The case proves that compared with the enterprise's current strategy and (t, s, S) strategy, improved dynamic (t, Qt) strategy has advantages. Numerical results also indicate that improvement by safety time performs better when the prediction error of demand is relatively small, otherwise improvement by safety stock is more stable in terms of the fill rate.