Structural properties of the optimal policy for dual-sourcing systems with general lead times

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

8 Scopus Citations
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Author(s)

  • Zhongsheng Hua
  • Yimin Yu
  • Wei Zhang
  • Xiaoyan Xu

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)841-850
Journal / PublicationIIE Transactions (Institute of Industrial Engineers)
Volume47
Issue number8
StatePublished - 3 Aug 2015

Abstract

This article considers a periodic-review inventory problem with two suppliers. The regular supplier has a longer lead time than the expedited supplier but has a lower unit cost. The structural properties of the optimal orders are characterized using the notion of L♮-convexity. Interestingly, the optimal regular order is more sensitive to the late-to-arrive outstanding orders, but the optimal expedited order is more sensitive to the soon-to-arrive outstanding orders. A heuristic policy is designed that provides an average cost saving of 1.02% over the best heuristic policy in the literature.

Research Area(s)

  • Control policy, dual-sourcing, lead time