Note: Dual sourcing with nonidentical suppliers

Ranga V. Ramasesh, John Ord and Jack C. Hayya

Naval Research Logistics (NRL), 1993, vol. 40, issue 2, 279-288

Abstract: We analyze a dual‐sourcing inventory model with exponential lead times and constant unit demand in which the order quantity is split in some proportion between two sources of supply. Unlike earlier studies, we do not require that the two sources be identical in terms of the lead‐time parameters or the supply prices. We compare the expected total annual costs for the two‐source and the traditional single‐source models over a wide range of parameter values. We confirm the findings of earlier studies that, under stochastic lead times, dual sourcing yields savings in holding and shortage costs that could outweigh the incremental ordering costs. With this more general model, we demonstrate that savings from dual sourcing are possible even where the mean or the variability of the second source is higher. © 1993 John Wiley & Sons, Inc.

Date: 1993
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1002/1520-6750(199303)40:23.0.CO;2-W

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:wly:navres:v:40:y:1993:i:2:p:279-288

Access Statistics for this article

More articles in Naval Research Logistics (NRL) from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().