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Optimal Order Policies for Dual-Sourcing Supply Chains under Random Supply Disruption

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  • Rongfang Yan

    (College of Mathematics and Statistics, Northwest Normal University, Lanzhou 730070, China)

  • Dejun Kou

    (College of Mathematics and Statistics, Northwest Normal University, Lanzhou 730070, China)

  • Bin Lu

    (College of Mathematics and Statistics, Northwest Normal University, Lanzhou 730070, China)

Abstract

In this paper, we investigate inventory and order strategies of a two-echelon supply chain, which is composed of two unreliable suppliers that are subject to random disruption. We develop the gross weighted profit benchmark model and the service level constrained model of the supply chain, respectively. We derive the retailer’s optimal order quantity and analyze the retailer’ optimal order policy and also obtain the analytical closed-form solutions. In addition, some numerical examples are provided to illustrate the effect of disruption time, disruption probability and fill rate on the optimal decisions and expected profit.

Suggested Citation

  • Rongfang Yan & Dejun Kou & Bin Lu, 2019. "Optimal Order Policies for Dual-Sourcing Supply Chains under Random Supply Disruption," Sustainability, MDPI, vol. 11(3), pages 1-14, January.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:3:p:698-:d:201601
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    References listed on IDEAS

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    Cited by:

    1. Md. Tariqul Islam & Abdullahil Azeem & Masum Jabir & Ananna Paul & Sanjoy Kumar Paul, 2022. "An inventory model for a three-stage supply chain with random capacities considering disruptions and supplier reliability," Annals of Operations Research, Springer, vol. 315(2), pages 1703-1728, August.
    2. Xiaodan Jin & Hong Zhou, 2022. "Incentives to Enhance Production Reliability against Disruption: Cost-Sharing vs. Penalty," Sustainability, MDPI, vol. 14(15), pages 1-18, July.

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