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Modeling and analysis for determining optimal suppliers under stochastic lead times

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Modeling and analysis for determining optimal suppliers under stochastic lead times. / Abginehchi, Soheil; Farahani, Reza Zanjirani.

In: Applied Mathematical Modelling, Vol. 34, No. 5, 2010, p. 1311-1328.

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Abginehchi, Soheil ; Farahani, Reza Zanjirani. / Modeling and analysis for determining optimal suppliers under stochastic lead times. In: Applied Mathematical Modelling. 2010 ; Vol. 34, No. 5. pp. 1311-1328.

Bibtex

@article{1a770230e4a411deafb9000ea68e967b,
title = "Modeling and analysis for determining optimal suppliers under stochastic lead times",
abstract = "The policy of simultaneously splitting replenishment orders among several suppliers has received considerable attention in the last few years and continues to attract the attention of researchers. In this paper, we develop a mathematical model which considers multiple-supplier single-item inventory systems. The item acquisition lead times of suppliers are random variables. Backorder is allowed and shortage cost is charged based on not only per unit in shortage but also per time unit. Continuous review (s,Q) policy has been assumed. When the inventory level depletes to a reorder level, the total order is split among n suppliers. Since the suppliers have different characteristics, the quantity ordered to different suppliers may be different. The problem is to determine the reorder level and quantity ordered to each supplier so that the expected total cost per time unit, including ordering cost, procurement cost, inventory holding cost, and shortage cost, is minimized. We also conduct extensive numerical experiments to show the advantages of our model compared with the models in the literature. According to our extensive experiments, the model developed in this paper is the best model in the literature which considers order splitting for n-supplier inventory systems since it is the nearest model to the real inventory system.",
keywords = "Order splitting, Inventory, Supply chain, Multiple sourcing, Random lead-time",
author = "Soheil Abginehchi and Farahani, {Reza Zanjirani}",
year = "2010",
doi = "10.1016/j.apm.2009.08.021",
language = "English",
volume = "34",
pages = "1311--1328",
journal = "Applied Mathematical Modelling",
issn = "0307-904X",
publisher = "Elsevier Inc.",
number = "5",

}

RIS

TY - JOUR

T1 - Modeling and analysis for determining optimal suppliers under stochastic lead times

AU - Abginehchi, Soheil

AU - Farahani, Reza Zanjirani

PY - 2010

Y1 - 2010

N2 - The policy of simultaneously splitting replenishment orders among several suppliers has received considerable attention in the last few years and continues to attract the attention of researchers. In this paper, we develop a mathematical model which considers multiple-supplier single-item inventory systems. The item acquisition lead times of suppliers are random variables. Backorder is allowed and shortage cost is charged based on not only per unit in shortage but also per time unit. Continuous review (s,Q) policy has been assumed. When the inventory level depletes to a reorder level, the total order is split among n suppliers. Since the suppliers have different characteristics, the quantity ordered to different suppliers may be different. The problem is to determine the reorder level and quantity ordered to each supplier so that the expected total cost per time unit, including ordering cost, procurement cost, inventory holding cost, and shortage cost, is minimized. We also conduct extensive numerical experiments to show the advantages of our model compared with the models in the literature. According to our extensive experiments, the model developed in this paper is the best model in the literature which considers order splitting for n-supplier inventory systems since it is the nearest model to the real inventory system.

AB - The policy of simultaneously splitting replenishment orders among several suppliers has received considerable attention in the last few years and continues to attract the attention of researchers. In this paper, we develop a mathematical model which considers multiple-supplier single-item inventory systems. The item acquisition lead times of suppliers are random variables. Backorder is allowed and shortage cost is charged based on not only per unit in shortage but also per time unit. Continuous review (s,Q) policy has been assumed. When the inventory level depletes to a reorder level, the total order is split among n suppliers. Since the suppliers have different characteristics, the quantity ordered to different suppliers may be different. The problem is to determine the reorder level and quantity ordered to each supplier so that the expected total cost per time unit, including ordering cost, procurement cost, inventory holding cost, and shortage cost, is minimized. We also conduct extensive numerical experiments to show the advantages of our model compared with the models in the literature. According to our extensive experiments, the model developed in this paper is the best model in the literature which considers order splitting for n-supplier inventory systems since it is the nearest model to the real inventory system.

KW - Order splitting

KW - Inventory

KW - Supply chain

KW - Multiple sourcing

KW - Random lead-time

U2 - 10.1016/j.apm.2009.08.021

DO - 10.1016/j.apm.2009.08.021

M3 - Journal article

VL - 34

SP - 1311

EP - 1328

JO - Applied Mathematical Modelling

JF - Applied Mathematical Modelling

SN - 0307-904X

IS - 5

ER -