 A note on the random yield from the perspective of the supply chainXiang Li, Yongjian Li and Xiaoqiang Cai Omega, 2012, vol. 40, issue 5, 601-610 Abstract: Keren [The single-period inventory problem: extension to random yield from the perspective of the supply chain. Omega 2009;37:801–10] considers a supply chain in which the distributor faces a known demand and orders from the producer subject to a random production yield, and shows that the distributor may find it optimal to order more than what is needed due to supply uncertainty under a uniform distribution. However, Keren (2009) does not address the questions whether it is always optimal for the distributor to order more, or when to order more. In this note, we point out that ordering more is not always an optimal strategy and specify the condition under which this strategy becomes optimal. We also examine the profit losses of the supply chain members resulting from the random yield supply, which is another question not considered in Keren (2009). The producer is found to possibly benefit from this production yield uncertainty, although the performances of the distributor and of the entire supply chain are always undermined. Our results are obtained under a more generalized yield distribution, and can thus be applied to wider industrial domains. Keywords: Random yield; Supply chain management; Inventory control (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:jomega:v:40:y:2012:i:5:p:601-610 Ordering information: This journal article can be ordered from DOI: 10.1016/j.omega.2011.12.003 Access Statistics for this article Omega is currently edited by B. Lev More articles in Omega from Elsevier |
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