Economics at your fingertips  

A new newsvendor policy model for dual-sourcing supply chains by considering disruption risk and special order

Ashkan Mohsenzadeh Ledari (), Seyed Hamid Reza Pasandideh () and Mehrdad Nouri Koupaei ()
Additional contact information
Ashkan Mohsenzadeh Ledari: Kharazmi University
Seyed Hamid Reza Pasandideh: Kharazmi University
Mehrdad Nouri Koupaei: Kharazmi University

Journal of Intelligent Manufacturing, 2018, vol. 29, issue 1, No 15, 237-244

Abstract: Abstract Newsvendor model is one of the most important issues in inventory models. In this paper, we investigate a newsvendor model without lead time, which have difference between distributer and wholesale/retailer. At the end of day, the residual products of newsvendor sold to a secondary market at a unit salvage value. Also, the amount of orders that cannot be met, should be paid the penalty for each unit. In addition, in each one of channels, the percent of these orders cannot be met by the distributer. Then, the newsvendor provides the difference between the amount that ordered to distributor and the amount that met in the occurrence of interruptions risk as a special order from the manufacturer, more expensive than the price of distributor. The limitations of the study are the procurement budget that used for special order. Finally, the model is applied in a real case as a numerical example to determine order amount that maximize profit and is solved by Maple 15. The Kuhn–Tucker method was used to illustrate the optimal points that have necessary condition. Also, the hessian matrix was used to illustrate the optimal points that have sufficient condition for optimization. Consequently, the considered points are global optimum. The main factor in the disruption risk that effect on the ordering amount and profit, are including the probability of appearing of disruption $$(p_i)$$ ( p i ) and a percent of ordering amount which are met in the case of appearing of disruption $$(y_i)$$ ( y i ) . Therefore, the analysis of sensitivity has been done on two parameters of $$p_i$$ p i and $$y_i$$ y i by using contour curves. According to result of solved problem, the change of disruption appearance reduced. Finally, the proposed method besides being simple is so exact which is sensible in the solved problems.

Keywords: Disruption risk; Newsvendor; Special order; Dual-sourcing; Kuhn–Tucker (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Journal of Intelligent Manufacturing is currently edited by Andrew Kusiak

More articles in Journal of Intelligent Manufacturing from Springer
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-11-06
Handle: RePEc:spr:joinma:v:29:y:2018:i:1:d:10.1007_s10845-015-1104-y