A continuous review model for an inventory system with two supply modes
Management Science
Diversification under supply uncertainty
Management Science
A Newsvendor's Procurement Problem when Suppliers Are Unreliable
Manufacturing & Service Operations Management
Outsourcing via Service Competition
Management Science
Impact of Supply Learning When Suppliers Are Unreliable
Manufacturing & Service Operations Management
Optimal Supply Diversification Under General Supply Risks
Operations Research
Mitigating Supply Risk: Dual Sourcing or Process Improvement?
Manufacturing & Service Operations Management
TECHNICAL NOTE---Procurement Strategies with Unreliable Suppliers
Operations Research
Unreliable newsboy problem with a forecast update
Operations Research Letters
An inventory system with two suppliers and default risk
Operations Research Letters
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Diversification under supply uncertainty has been adopted by manufacturers in order to improve performance. In the presence of multiple suppliers, it is essential to develop an operational policy in order to utilize the services of different suppliers effectively. Anupindi and Akella (Manage. Sci. 39 (8) (1993) 944-963) consider two suppliers differing in cost and reliability and develop the optimal inventory policy for the manufacturer under continuous demand distribution. The policy obtained by them indicates that the manufacturer should never order products from the more expensive supplier alone. In this paper, we consider the case where demand is discrete and provide examples to show that ordering products from the more expensive (and more reliable) supplier alone is optimal. We also provide sufficient conditions under which it is optimal to order a larger share from the more expensive supplier when demand is discrete.