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Reducing lead time risk through multiple sourcing: the case of stochastic demand and variable lead time

Glock, C.H. and Ries, J.M. (2013). Reducing lead time risk through multiple sourcing: the case of stochastic demand and variable lead time. International Journal of Production Research, 51(1), pp. 43-56. doi: 10.1080/00207543.2011.644817

Abstract

This paper studies a buyer sourcing a product from multiple suppliers under stochastic demand. The buyer uses a (Q, s) continuous review, reorder point, order quantity inventory control system to determine the size and timing of orders. Lead time is assumed to be deterministic and to vary linearly with the lot size, wherefore lead time and the associated stockout risk may be influenced by varying the lot size and the number of contracted suppliers. This paper presents mathematical models for a multiple supplier single buyer integrated inventory problem with stochastic demand and variable lead time and studies the impact of the delivery structure on the risk of incurring a stockout during lead time.

Publication Type: Article
Additional Information: This is an Accepted Manuscript of an article published online by Taylor & Francis in International Journal of Production Research on 16/01/2012, available online: http://www.tandfonline.com/10.1080/00207543.2011.644817.
Publisher Keywords: variable lead time, supply chain coordination, supplier selection, multiple sourcing, delivery structure, integrated inventory
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments: Cass Business School > Management
URI: http://openaccess.city.ac.uk/id/eprint/17126
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