 A periodic-review inventory system with a capacitated backup supplier for mitigating supply disruptionsJunlin Chen, Xiaobo Zhao and Yun Zhou European Journal of Operational Research, 2012, vol. 219, issue 2, 312-323 Abstract: We consider a periodic-review inventory system with two suppliers: an unreliable regular supplier that may be disrupted for a random duration, and a reliable backup supplier that can be used during a disruption. The backup supplier charges higher unit purchasing cost and fixed order cost when compared to the regular supplier. Because the backup supplier is used at unplanned moments, its capacity to replenish inventory is considered limited. Analytical results partially characterize the structure of the optimal order policy: a state-dependent (X(i),Y(i)) band structure (with corresponding bounds of X(i) and Y(i) to be given), where i represents the status of the regular supplier. Numerical studies illustrate the structure of the optimal policy and investigate the impacts of major parameters on optimal order decisions and system costs. Keywords: Inventory; Supply risk; Disruption; (X,Y) band; Capacity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:219:y:2012:i:2:p:312-323 DOI: 10.1016/j.ejor.2011.12.031 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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