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4.6. Conclusions<br />

location as a candidate serving location), we need to search one more perturbation of<br />

(�x − �e3). In Table 4.11, we depict the serving behavior of the RMH at each D/C ratio.<br />

For example, if the D/C ratio is 0.6, then 91.07% of the customers in 1000 simulation<br />

runs are served from the nearest location. As the D/C ratio increases, we observe that<br />

less customers are served from the nearest location. This is due to the strategic nature of<br />

the RMH. However, the nearest location still serves the highest numbers of customers. It<br />

is easy to observe from the table, that the actual computational complexity of the RMH<br />

is considerably lower than the theoretical upper bound.<br />

Table 4.11: Large Scale Experiment - Serving Behavior of RMH<br />

Stock Location Demand / Capacity ratio<br />

Rank 0.6 0.8 1.0 1.2 1.4<br />

1 91.07% 86.42% 83.55% 81.99% 75.78%<br />

2 8.70% 12.81% 15.07% 16.11% 20.59%<br />

3 0.22% 0.73% 1.25% 1.65% 3.10%<br />

4 0.01% 0.03% 0.13% 0.23% 0.48%<br />

5 0.00% 0.00% 0.00% 0.02% 0.06%<br />

6 0.00% 0.00% 0.00% 0.00% 0.00%<br />

7 0.00% 0.00% 0.00% 0.00% 0.00%<br />

8 0.00% 0.00% 0.00% 0.00% 0.00%<br />

9 0.00% 0.00% 0.00% 0.00% 0.00%<br />

4.6 Conclusions<br />

In this chapter, we studied a real life spare parts logistics situation. Specifically, we<br />

focused on the situation where spare parts stock planning has already been performed<br />

and the objective is to execute the spare parts logistics. We observed that the approach<br />

typically practiced in spare parts logistics such as the SRH follows the principle of First<br />

In First Out (FIFO). The SRH fails to accommodate prevalent characteristics of spare<br />

parts logistics (such as customer heterogeneity and sourcing flexibility). In this chapter,<br />

we addressed these shortcomings by devising an execution technique that follows the<br />

flexible service concepts from RM and uses detailed customer information provided by<br />

the installed base data.<br />

We devise the execution technique by modeling the spare parts logistics execution<br />

situation as a discrete time finite horizon MDP formulation. The detailed analysis of<br />

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