Gaining competitive advantage in spare parts logistics through inventory control based on optimization via simulation and data aggregation
Kateřina Hušková, Dyntar Jakub
Keywords:
supply chain management, inventory control, sporadic demand, demand data aggregation, optimization via simulation
Abstract:
In this paper, we examine how a demand data aggregation affects the consumption of computational time in sporadic demand inventory control based on a past stock movement simulation (PSMS). PSMS represents a data-driven approach, which instead of estimating order lead time demand with help of a forecasting method rather focuses on a combinatorial optimization using an evolution of a replenishment process over a time. We simulate an all combinations search, a local search and modified local search together with (s, S) inventory control policy and a demand data aggregation ranging from 1 to 40 days using real daily demand data for 12,374 spare car parts covering a one-year period. The outputs from PSMS prove that an increasing data aggregation significantly shortens the time of searching for an s, S combination, ensuring the optimal trade-off between the fill rate and holding and ordering costs. However, the level of aggregation has to be set carefully, because once the positive effect of the aggregation is depleted, holding and ordering costs tend to increase rapidly according to growing average inventory. Acceleration through the data aggregation brings PSMS nearer to applications in extensive supply chain management real life tasks dealing with inventory control of products with sporadic demand.
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 Gaining competitive advantage in spare parts logistics through inventory control based on optimization via simulation and data aggregation [PDF file] [Filesize: 502.7 KB]
 10.7441/joc.2025.02.04
Hušková, K., & Dyntar, J. (2025). Gaining competitive advantage in spare parts logistics through inventory control based on optimization via simulation and data aggregation. Journal of Competitiveness, 17(2). https://doi.org/10.7441/joc.2025.02.04
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