A repair service supply chain optimization model with manpower utilization and service quality considerations through the Taguchi quality loss function

The distinct qualities of services have disabled its ability to benefit from the current supply chain models in place. This in turn has limited the capacity of service providers to optimize their operations through scientific methods of decision trade off calculation. More specifically in the repair service industry, where ordering decisions meet cost considerations and staffing decisions compromise service quality and manpower utilization. The study considers a mathematical model aimed at optimizing the profitability of repair service providers by incorporating the components of its supply chain into the model. The model makes use of the Taguchi Quality Loss Function as its main basis for quality cost considerations implied by the utilization of its manpower. The ordering and allocation decisions made by the model simultaneously take into consideration the service level requirement and service demand satisfaction cost implications. Results indicate that high manpower utilization is not always ideal in a service context, as it creates unwanted quality costs incurred from the poor quality of services. The cost of manpower must be evenly weighed out against the cost of quality in order to attain optimum execution in terms of quality and cost. As for spare parts ordering and allocation, the costs of obsolescence and opportunity must be evenly weighed out with priority to the service level requirements of each shop in order to achieve optimum performance in terms of cost and profitability