Simulation-optimization approach based on multi-criteria decision making methods in spare parts inventory management

Inventory management plays a critical role in the success of firms. Therefore, inventory control and planning of all assets in the production system should be done effectively. Spare parts groups, large number and variety make inventory management a more complex problem. Lack of spare parts can lead to disruption of production activities and cost losses. In this study, the criteria for the criticality of spare parts were determined by literature review and expert evaluations. For a large-scale gypsum company, the most critical spare part was selected with the integrated AHP-TOPSIS method. With the integrated ABC-FSN analysis for the selected spare parts group, the three most frequently used types of critical spare parts were identified. The importance levels of these three varieties on total cost were determined and reflected to the cost function. The most suitable (s, S) parameter values were determined by simulation optimization for three types of critical spare parts considering the objective function and constraints. Equivalence of spare parts was also taken into consideration in the study. Keywords: Spare parts, (s,S), AHP, TOPSIS, simulation-optimization