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Deriving the cost function of an integrated dyadic supply chain with uncertainty in the supply

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  • S. Mehdi Sajadifar
  • Behrooz Pourghannad

Abstract

This paper considers a dyadic supply chain with an uncertain supplier. Both the retailer and the supplier use continuous review policy. The supplier is randomly available for supplying the retailer. The retailer faces Poisson demands. In this system, lead time is a random variable consists of a constant transportation time plus a random delay occurs due to availability of stock at the supplier. In this paper, for the first time in the literature, we consider both the integrity and the uncertainty in the above supply chain. The main distinguishing characteristic of this paper, in comparison with the existing literature, is considering simultaneously two main concepts, namely the integration and unreliable supplier, through modelling the problem. We derive a good approximation for the total cost function of described system, using weighted mean costs of the one-for-one ordering policy. Finally, using simulation studies, we show that absolute errors are significantly ignorable.

Suggested Citation

  • S. Mehdi Sajadifar & Behrooz Pourghannad, 2012. "Deriving the cost function of an integrated dyadic supply chain with uncertainty in the supply," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 11(1/2), pages 154-166.
    • Handle: RePEc:ids:ijisen:v:11:y:2012:i:1/2:p:154-166
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    Cited by:

    1. S. K. Karuppasamy & R. Uthayakumar, 2019. "Coordination of a three-level supply chain with variable demand and order size dependent trade credit in healthcare industries," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 10(2), pages 285-298, April.

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