Customer Information Driven After Sales Service ... - RePub

4.5. Numerical Experiments
plexity is significantly reduced due to the local search. In Section 4.5.3, we discuss the
computational efficiency aspects of the MDP approach, RMH+, and RMH.
4.5 Numerical Experiments
In this section, we analyze the performance of our proposed RMH against the MDP
approach, RMH+ and existing Spiral Router heuristic (SRH) at IBM (described in Section
2.7.1). According to SRH, each incoming demand should be fulfilled from nearest
non-empty stock location. From stock location perspective, SRH heuristic is of FIFO or
FCFS nature where each incoming customer, regardless of the contract type it posses,
gets a spare part. From customer perspective, the objective is find nearest neighbor
stock location that is non-empty. We should note that SRH is conceptually similar to
nearest neighbor heuristic proposed by Bertsimas and Van Ryzin (1991). The authors
propose nearest neighbor heuristics for service engineer dispatching problem, where each
incoming demand request is to be served by nearest available service engineer. Although,
the formal proof of optimality is not provided, the authors show that nearest neighbor
heuristic performs better than other execution heuristic for service engineer dispatching
problem. There are two major differences between service engineering dispatching
problem considered by Bertsimas and Van Ryzin (1991) and current problem settings
of spare parts logistics execution. First, service engineer resources are reused to service
future demand requests. In other words, a service engineer who is being considered for
the incoming job may be sent from his current idle location or his current working location
(i.e. customer location). Due to this, the current service engineer dispatching
decision is dependent on preceding dispatching decision for given service engineer. In
spare parts logistics, a part is always sent from either of the non-empty stock locations
(fixed locations). Secondly, the analysis performed by Bertsimas and Van Ryzin (1991)
does not account for customer base heterogeneity.
As mentioned in Section 4.1, our goal in this chapter is to develop a technique that
accounts for various aspects of customer heterogeneities in spare parts logistics execution.
The heterogeneities in the customer base exist due to distinct contractual agreements and
customer locations. Due to the distant service contracts for a single spare part type, the
customers pay different service prices for the maintenance service. Similarly, the penalty
costs associated with service deadline violations are also different per service contract.
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