Sole versus dual sourcing in stochastic lead-time (s, Q) inventory models

Article Abstract:

Dual sourcing was compared to single sourcing in the context of the reorder-point/order quantity stochastic lead-time inventory model under conditions of constant demand. Uniform and exponential distributions were studied because they represented two extremes in stochastic lead times. The order quantity was divided equally between the two vendors in the two-vendor model, and the divided orders were placed at the same time when inventory reached the reorder point. This demonstrates that dual-sourcing can be cost-effective when lead-time uncertainty is high and ordering costs are low.

Lead time

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The Dynamic Lot-Size Model with Stochastic Lead Times

Article Abstract:

Dynamic lot-sizing for problems with determined demands, but stochastic lead times are lumpy. A solution exists where interdependence of lead times is critical. When orders cannot cross in time under the lead time distribution each order covers a sequence of consecutive demands. When orders can cross in time each order consists of a subset of demands, not necessarily consecutive.

Dynamic programming, Decision trees, Modeling, Data modeling software, Inventory Control, Optimization, Stochastic Model, Lead Times, Decision Tree

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The Dynamic Lot-Size Model with Stochastic Lead Times

Article Abstract:

Dynamic lot-sizing costs are affected by lead time uncertainty. Optimal solutions for dynamic lot-sizing with deterministic demands but uncertain lead times are examined. A stochastic dynamic programming algorithm is developed. A decision tree is the basis for the analysis. An optimal solution is given when orders do not cross. A general case with an example is presented.

Algorithms, Stochastic Processes

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