Dual Sourcing Under Random Supply Capacities: The Role of the Slow Supplier

• 成果类型: Article
• 署名作者: Tan, Burcu; Feng, Qi; Chen, Wen
• 署名单位: Tulane University; Purdue University System; Purdue University; Providence College
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12548
• 发表日期: 2016
• 页码: 1232-1244
• 关键词: random yield problem; myopic heuristics; inventory problem; Uncertain demand; delivery modes; policies; diversification; COMPETITION; strategies; systems

摘要

Sourcing from multiple suppliers with different characteristics is common in practice for various reasons. This paper studies a dynamic procurement planning problem in which the firm can replenish inventory from a fast and a slow supplier, both with uncertain capacities. The optimal policy is characterized by two reorder points, one for each supplier. Whenever the pre-order inventory level is below the reorder point, a replenishment order is issued to the corresponding supplier. Interestingly, the reorder point for the slow supplier can be higher than that of the fast even if the former has a higher cost, lower reliability, and smaller capacity than the latter, suggesting the possibility of ordering exclusively from an inferior slow supplier in the short term. Moreover, the firm may allocate a larger portion of the long-term total order quantity to the slow supplier than to the fast, even if the former does not possess any cost or reliability advantage over the latter. Such phenomena, different from the observations made in previous studies, happen when the demand is uncertain and the supply is limited or unreliable. Our observations highlight the importance of incorporating both demand uncertainty and supplier characteristics (i.e., cost, lead time, capacity and uncertainty) in a unified framework when formulating supplier selection and order allocation strategies.