A sustainable EOQ model for repairable spare parts under uncertain demand

Abstract

This paper considers issues of sustainability in the context of spare parts logistics. In particular, the single-product replenishment problem is formulated and an optimal order quantity is derived by minimizing a cost function that includes both economic and environmental costs relating to repair and replacement, including the environmental cost of the production of new parts and the disposal of used parts. The optimal means of transport, the optimal repair policy, and the corresponding optimal value of the sustainable economic order quantity (SOQ) are calculated. A numerical example derived from industrial field data is presented to test the model. Results are discussed and compared with classical EOQ model solutions. SOQ values larger than EOQ, slow means of transportation and high repair rates minimize the cost function, while fast means of transportation are identified as the optimal choice only when transport distances are short and spare parts demand is highly variable.

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