Evaluating the (Q, R) model in maintenance materials management
by Antti Puurunen; Jukka Majava; Hanna Kropsu-Vehkapera; Pekka Kess
International Journal of Logistics Economics and Globalisation (IJLEG), Vol. 6, No. 3, 2015

Abstract: This research studies the applicability of widely applied continuously reviewed fixed order quantity (Q) and reorder point (R) inventory policy, i.e. the (Q,R) model used in the inventory management of maintenance materials. The aim is to identify the main challenges in applying the (Q,R) model to the maintenance context in investment-intensive industry companies. The research is based on a case study that utilizes real data gathered from the case company's inventory operations. The results indicate that the case company's inventory levels are not controlled by the parameters of the (Q,R) model, which leads to overstocking with a share more than 19.1%. A mechanism causing inventory uncontrollability due to return material flows is also identified. The results indicate that managers should address more attention to the structure of the internal supply chain. Recommendations for reducing the amount of uncontrollable material flows include, returning excess materials to the suppliers, improving demand forecasting, and establishing a transaction type for repairables.

Online publication date: Tue, 29-Dec-2015

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