Dual sourcing in a serial system

Description

We consider a finite-horizon, periodic-review model for a serial system with two uncapacitated external suppliers. One supplier (the regular supplier) ships to the most upstream stage, while the other (the emergency supplier) ships directly to a downstream stage. For this system, under general lead times, we show that the optimal cost function is multimodular with respect to inventories in transit and inventories at different stages. We also derive results that characterize how optimal order quantities vary with these inventories. Our analysis further establishes sufficient conditions under which modified echelon base-stock policies are optimal.

Publication Date

1-1-2014

Keywords

Inventory management, Dynamic programming, Multimodularity, Dual sourcing, Serial system

Conference

18th Annual International Conference of Society of Operations Management, 13-14 December, 2014, IIT Roorkee

This document is currently not available here.

Share

COinS