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Coordinating overseas and local sourcing through a capacitated expediting transportation policy

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  • Yin, Zhe
  • Wang, Chen
  • Yin, Qian

Abstract

We consider an assembly system that adopts both overseas sourcing and local sourcing for different components. Local sourcing has a short and deterministic lead-time. Overseas sourcing can be divided into two stages and each stage has uncertain transportation duration. A capacitated expediting service could be adopted after first-stage transportation. In this study, we derive an optimal expediting policy for overseas sourcing and an optimal responsive sourcing policy for local sourcing. In addition, we discuss the impacts of lead-time volatility and the decision of safety lead-time, which are relevant in implementing the expediting service.

Suggested Citation

  • Yin, Zhe & Wang, Chen & Yin, Qian, 2018. "Coordinating overseas and local sourcing through a capacitated expediting transportation policy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 258-271.
    • Handle: RePEc:eee:transe:v:118:y:2018:i:c:p:258-271
    DOI: 10.1016/j.tre.2018.08.003
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    References listed on IDEAS

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    Cited by:

    1. Maheswar Singh Mahapatra & Pravash Chandra Pradhan & J. K. Jha, 2022. "Sourcing decisions with order allocation under supply disruption risk considering quantitative and qualitative criteria," Operational Research, Springer, vol. 22(4), pages 3291-3333, September.
    2. Lv, Fei & Xiao, Lei & Xu, Minghui & Guan, Xu, 2019. "Quantity-payment versus two-part tariff contracts in an assembly system with asymmetric cost information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 60-80.
    3. Li, Ying & Shou, Yongyi & Ding, Ronggui & Sun, Tao & Zhou, Qing, 2019. "Governing local sourcing practices of overseas projects for the Belt and Road Initiative: A framework and evaluation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 212-226.

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