Spare part demand forecasting for consumer goods using installed base information

Article


Kim, T., Dekker, R. and Heij, C. 2017. Spare part demand forecasting for consumer goods using installed base information. Computers and Industrial Engineering. 103, pp. 201-215. https://doi.org/10.1016/j.cie.2016.11.014
TypeArticle
TitleSpare part demand forecasting for consumer goods using installed base information
AuthorsKim, T., Dekker, R. and Heij, C.
Abstract

When stopping production, the manufacturer has to decide on the lot size in the final production run to cover spare part demand during the end-of-life phase. This decision can be supported by forecasting how much demand is expected in the future. Forecasts can be obtained from the installed base of the product, that is, the number of products still in use. This type of information is relatively easily available in case of B2B maintenance contracts, but it is more complicated in B2C spare parts supply management. Consumer decisions on whether or not to repair a malfunctioning product depend on the specific product and spare part. Further, consumers may differ in their decisions, for example, for products with fast innovations and changing social trends. Consumer behavior can be accounted for by using appropriate types of installed base, for example, lifetime installed base for essential spare parts of expensive products with long lifecycle, and warranty installed base for products with short lifecycle. This paper proposes a set of installed base concepts with associated simple empirical forecasting methodologies that can be applied in practice for B2C spare parts supply management during the end-of-life phase of consumer products. The methodology is illustrated by case studies for eighteen spare parts of six products from a consumer electronics company. The research hypotheses on which installed base type performs best under which conditions are supported in the majority of cases, and forecasts obtained from installed base are substantially better than simple black box forecasts. Incorporating past sales via installed base therefore supports final production decisions to cover future consumer demand for spare parts.

KeywordsInstalled base forecast, End-of-life service, Decision support, Consumer goods, Spare parts
LanguageEnglish
PublisherElsevier
JournalComputers and Industrial Engineering
ISSN0360-8352
Publication dates
Online23 Nov 2016
Print01 Jan 2017
Publication process dates
Deposited06 Nov 2019
Accepted13 Nov 2016
Output statusPublished
Accepted author manuscript
License
Copyright Statement

© 2016. This author's accepted manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Digital Object Identifier (DOI)https://doi.org/10.1016/j.cie.2016.11.014
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