An inventory model for slow moving items subject to obsolescence

摘要

Holding spare parts inventory without hampering the customer needs of slow moving items for service centric operations is a difficult problem due to high rate of obsolescence. Scarcity of historical data and the reduction in the demand rate makes the problem more complicated. Now companies are tracking their installed products to examine the changes in the customer needs for spares which help to know the demand rate lowering in advance. If such changes can be foreseen in advance companies can reduce their inventory of such items and can cope up with any emergency requirements with moving stocks to meet the demand. This paper focuses on a continuous review inventory system of a slow moving item for which the demand rate drops to a lower level at a known future instance. The inventory system for this is controlled according to a one-for-one replenishment policy with a fixed lead time. The lower demand takes away the excess stock and this policy if planned in advance can avoid a stock out position as well as excess inventory. The objective is to find the optimal time for a policy change and to examine the impact of the policy on costs incurred during the transient period. (20 refs.)