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Lifetime Buy Decisions with Multiple Obsolete Parts
Author(s) -
Bradley James R.,
Guerrero Héctor H.
Publication year - 2009
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2009.01007.x
Subject(s) - obsolescence , heuristics , product (mathematics) , computer science , heuristic , product lifecycle , work (physics) , simple (philosophy) , operations research , operations management , new product development , economics , business , marketing , mathematics , artificial intelligence , engineering , mechanical engineering , philosophy , geometry , epistemology , operating system
L ife‐cycle mismatch occurs when the life cycles of parts end before the life cycles of the products in which those parts are used. Lifetime buys are one tactic for mitigating the effect of part obsolescence, where a quantity of parts is purchased for the remaining life of a product. We extend prior work that determines optimal lifetime buy quantities for one product with one obsolete part by providing an analytic solution and two simple heuristic policies for the optimal lifetime buy quantities when many parts become obsolete over a product's life cycle. We determine which of our two heuristics is most accurate for different product life cycles, which yields a metaheuristic with increased accuracy. That analysis also reveals critical perspectives in making lifetime buy decisions with nonstationary life‐cycle demand patterns.