Inventory model optimization revisited: Understanding service inventories to improve performance

© 2020 Sharif University of Technology. All rights reserved.Services are becoming increasingly important in the modern economy for both service and manufacturing firms; however, the inventory literature is focused mainly on physical goods and, thus, only few studies have considered services in optimization. Further to that, the traditional service management literature relies on an extremely narrow definition of inventory that excludes services because they are perishable. Thus, there is a lack of research on possible links between inventory optimization and service management. However, according to a new service inventory approach, business components such as tasks or information, as different from physical goods, can be performed and stored in anticipation of service demand as a form of service inventory, that is, inventorying by anticipation rather than delaying the service. This paper aims to contribute to this lack of research by proposing a service inventory optimization model that integrates a service orientation to optimize tasks and information to be performed in advance. In contrast with the traditional inventory models where the objective is to optimize physical items, in this approach, physical products (whenever included) constitute only mechanisms for service provision. This service inventory model contributes to the optimization of the quantity of tasks or information to be anticipated and, thus, provides customers with a number of benefits.

Inventory model optimization revisited: Understanding service inventories to improve performance Academic Article in Scopus