IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v57y2006i2d10.1057_palgrave.jors.2601974.html
   My bibliography  Save this article

Order splitting in single sourcing with scheduled-release orders

Author

Listed:
  • A K Mishra

    (State University of New York)

  • P R Tadikamalla

    (University of Pittsburgh)

Abstract

Traditional inventory models assume that a buyer places one order with a supplier in each order cycle. A large number of researchers have studied the benefits of dual sourcing such that an order quantity is split and placed simultaneously with two suppliers. We show that many of the benefits of dual sourcing are due to order splitting rather than using two suppliers. We investigate order splitting with one supplier such that the first part of the order is sent out immediately but the second part of the order is released later (scheduled-release). Through extensive computational results, we show that in many situations where dual sourcing or the use of a cheaper supplier would be cost effective, single sourcing with order splitting using scheduled-release orders is better. The paper provides a quantitative rationale to continue with one supplier. We also summarize the qualitative reasons to prefer single sourcing or multiple sourcing.

Suggested Citation

  • A K Mishra & P R Tadikamalla, 2006. "Order splitting in single sourcing with scheduled-release orders," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(2), pages 177-189, February.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:2:d:10.1057_palgrave.jors.2601974
    DOI: 10.1057/palgrave.jors.2601974
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2601974
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2601974?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tadikamalla, Pandu R, 1984. "A comparison of several approximations to the lead time demand distribution," Omega, Elsevier, vol. 12(6), pages 575-581.
    2. Ranga V. Ramasesh & J. Keith Ord & Jack C. Hayya & Andrew Pan, 1991. "Sole Versus Dual Sourcing in Stochastic Lead-Time (s, Q) Inventory Models," Management Science, INFORMS, vol. 37(4), pages 428-443, April.
    3. Lau, Hon-Shiang & Zhao, Long-Geng, 1993. "Optimal ordering policies with two suppliers when lead times and demands are all stochastic," European Journal of Operational Research, Elsevier, vol. 68(1), pages 120-133, July.
    4. James Richardson, 1993. "Parallel sourcing and supplier performance in the Japanese automobile industry," Strategic Management Journal, Wiley Blackwell, vol. 14(5), pages 339-350, July.
    5. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    6. Janssen, Fred & de Kok, Ton, 1999. "A two-supplier inventory model," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 395-403, March.
    7. Hill, Roger M., 1996. "Order splitting in continuous review (Q, r) inventory models," European Journal of Operational Research, Elsevier, vol. 95(1), pages 53-61, November.
    8. Sedarage, Dayani & Fujiwara, Okitsugu & Trung Luong, Huynh, 1999. "Determining optimal order splitting and reorder level for N-supplier inventory systems," European Journal of Operational Research, Elsevier, vol. 116(2), pages 389-404, July.
    9. F Janssen & Ton De Kok & F van der D Schouten, 2000. "Approximate analysis of the delivery splitting model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 51(10), pages 1136-1147, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yim, Andrew, 2010. "Quality Cost and Failure Risk in the Choice of Single versus Multiple Sourcing," MPRA Paper 27858, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    2. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    3. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    4. Meena, P.L. & Sarmah, S.P., 2013. "Multiple sourcing under supplier failure risk and quantity discount: A genetic algorithm approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 84-97.
    5. Huang, Rongbing & Menezes, Mozart B.C. & Kim, Seokjin, 2012. "The impact of cost uncertainty on the location of a distribution center," European Journal of Operational Research, Elsevier, vol. 218(2), pages 401-407.
    6. Mitra, Subrata, 2009. "Analysis of a two-echelon inventory system with returns," Omega, Elsevier, vol. 37(1), pages 106-115, February.
    7. Pérez, Cinthia & Geunes, Joseph, 2014. "A (Q,R) inventory replenishment model with two delivery modes," European Journal of Operational Research, Elsevier, vol. 237(2), pages 528-545.
    8. Jian Yang, 2004. "Production Control in the Face of Storable Raw Material, Random Supply, and an Outside Market," Operations Research, INFORMS, vol. 52(2), pages 293-311, April.
    9. Ryu, Si Wook & Lee, Kyung Keun, 2003. "A stochastic inventory model of dual sourced supply chain with lead-time reduction," International Journal of Production Economics, Elsevier, vol. 81(1), pages 513-524, January.
    10. Jong Soo Kim & K Y Shin & S E Ahn, 2003. "A multiple replenishment contract with ARIMA demand processes," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(11), pages 1189-1197, November.
    11. Arts, Joachim & Kiesmüller, Gudrun P., 2013. "Analysis of a two-echelon inventory system with two supply modes," European Journal of Operational Research, Elsevier, vol. 225(2), pages 263-272.
    12. Reimann, Marc, 2011. "Speculative production and anticipative reservation of reactive capacity by a multi-product newsvendor," European Journal of Operational Research, Elsevier, vol. 211(1), pages 35-46, May.
    13. Riezebos, Jan & Zhu, Stuart X., 2020. "Inventory control with seasonality of lead times," Omega, Elsevier, vol. 92(C).
    14. Riezebos, Jan, 2006. "Inventory order crossovers," International Journal of Production Economics, Elsevier, vol. 104(2), pages 666-675, December.
    15. Chi Chiang & W. C. Benton, 1994. "Sole sourcing versus dual sourcing under stochastic demands and lead times," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(5), pages 609-624, August.
    16. Gérard P. Cachon & Fuqiang Zhang, 2006. "Procuring Fast Delivery: Sole Sourcing with Information Asymmetry," Management Science, INFORMS, vol. 52(6), pages 881-896, June.
    17. Kelle, Peter & Miller, Pam Anders, 2001. "Stockout risk and order splitting," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 407-415, May.
    18. Zeinab Sazvar & Mohammad Reza Akbari Jokar & Armand Baboli, 2014. "A new order splitting model with stochastic lead times for deterioration items," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(9), pages 1936-1954, September.
    19. Klosterhalfen, Steffen & Kiesmüller, Gudrun & Minner, Stefan, 2011. "A comparison of the constant-order and dual-index policy for dual sourcing," International Journal of Production Economics, Elsevier, vol. 133(1), pages 302-311, September.
    20. Ganesh Janakiraman & Sridhar Seshadri & Anshul Sheopuri, 2015. "Analysis of Tailored Base-Surge Policies in Dual Sourcing Inventory Systems," Management Science, INFORMS, vol. 61(7), pages 1547-1561, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:57:y:2006:i:2:d:10.1057_palgrave.jors.2601974. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.