Optimization Models in Support of Performance Based Logistics (PBL) Contracts

Optimization Models in Support of Performance Based Logistics (PBL) Contracts

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Performance Based Logistics (PBL) is emerging as a preferred logistic support strategy within the public sector, especially the Department of Defense. Under a PBL strategy, the customer buys performance, such as operational availability, mission readiness and operational reliability, instead of contracting for a specified collection of resources defining the underlying support infrastructure. The literature on PBL is still in its infancy and additional research is required to optimize logistic resources such as spare parts, equipment, facilities, labor etc within a PBL context. Resource decisions now need to focus on profit margins as public sector contracts migrate from traditional cost plus fixed fee or fixed price to PBL contracts. The present research proposes new optimization models to determine the configuration of an operating system and the resource quantities and location comprising its support infrastructure that maximizes a supplier's profit. The first two models examine the allocation of spare resources; an item-based allocation algorithm is defined and the system-level, multi-item, multi-echelon METRIC theory (Sherbrooke 1968; Muckstadt 1973; Graves 1985; Sherbrooke 1986; Sherbrooke 2004) is extended to make it relevant to the PBL domain. Introducing the notion of profit in the new spares algorithm, coupled with its improved performance, then allows for the development of a new mathematical model to solve simultaneously the primary system's redundancy design problem and the enabling system's spares allocation problem.In fact, even then, the ample capacity has a high utilization; responsiveness to repair requests in a timely fashion is difficult in most industries. ... The simulation modela#39;s repair shop is based on a commercial airlinea#39;s repair facility for jet engines.

Title:Optimization Models in Support of Performance Based Logistics (PBL) Contracts
Author:David Richard Nowicki
Publisher:ProQuest - 2008


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