An inventory system with two suppliers and default risk

Authors:
Xiaoming Yan;Ke Liu
Affiliations:
School of Computer, Dongguan University of Technology, Dongguan, 523808, Guangdong, PR China and Institute of Applied Mathematics, Academy of Mathematics and Systems Sciences, Chinese Academy of S ...;Institute of Applied Mathematics, Academy of Mathematics and Systems Sciences, Chinese Academy of Sciences, Beijing, 100190, PR China
Venue:
Operations Research Letters
Year:
2009

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Abstract

This paper considers the problem of joint replenishment and pricing for a single product with two suppliers and supply disruption. Our objective is to maximize the total profit by choosing an appropriate replenishment and pricing policy. We not only obtain that the form of the optimal policy has a (s,S,p,@s,@S)-type, but also analyze how supply disruption affects the profit function and the optimal policy.