Dual Sourcing Inventory Model with Uncertain Supply and Advance Capacity Information

Marko Jakšič ()
Additional contact information
Marko Jakšič: University of Ljubljana

A chapter in Operations Research Proceedings 2014, 2016, pp 257-262 from Springer

Abstract: Abstract We model a periodic review, single stage dual sourcing inventory system with non-stationary stochastic demand, where replenishment can occur either through a regular stochastic capacitated supply channel with immediate delivery and/or an alternative uncapacitated supply channel with a longer fixed lead time. We focus on describing a situation in which upfront information on capacity availability of an unreliable supply channel is available, denoted as advance capacity information (ACI), to the customer. We derive the optimal dynamic programming formulation and we show some of the properties of the optimal policy by carrying out a numerical analysis. Additionally, our numerical results on the benefits of dual sourcing and the value of sharing ACI reveal several managerial insights.

Keywords: Sourcing Inventory Model; Information Upfront; Supply Channels; Regular Provider; Optimal Base Stock Level (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:oprchp:978-3-319-28697-6_36

Ordering information: This item can be ordered from
http://www.springer.com/9783319286976

DOI: 10.1007/978-3-319-28697-6_36

Access Statistics for this chapter

More chapters in Operations Research Proceedings from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().