A tight approximation for an EOQ model with supply disruptions

Lawrence V. Snyder

International Journal of Production Economics, 2014, vol. 155, issue C, 91-108

Abstract: We consider a continuous-review inventory model for a firm that faces deterministic demand but whose supplier experiences random supply disruptions. The supplier experiences “wet” and “dry” (operational and disrupted) periods whose durations are exponentially distributed. The firm follows an EOQ-like policy during wet periods but may not place orders during dry periods; any demands occurring during dry periods are lost if the firm does not have sufficient inventory to meet them.

Keywords: Inventory; Supply disruptions; Continuous review; EOQ; Approximations; Power-of-two policies (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:155:y:2014:i:c:p:91-108

DOI: 10.1016/j.ijpe.2014.01.025

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