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On the effect of overtime and subcontracting on supply chain safety stocks

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  • Aouam, Tarik
  • Kumar, Kunal

Abstract

In supply chain safety stock placement models, production lead times are typically considered exogenous; however, in many supply networks, lead times are controllable and should be considered as endogenous variables. This work integrates strategic safety stock placement with subcontracting and overtime planning that can be used to optimize lead times. We formulate the problem of jointly optimizing safety stocks and lead times to minimize production and inventory holding costs, while guaranteeing a customer service level.

Suggested Citation

  • Aouam, Tarik & Kumar, Kunal, 2019. "On the effect of overtime and subcontracting on supply chain safety stocks," Omega, Elsevier, vol. 89(C), pages 1-20.
    • Handle: RePEc:eee:jomega:v:89:y:2019:i:c:p:1-20
    DOI: 10.1016/j.omega.2018.09.010
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    Cited by:

    1. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2022. "Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach," Omega, Elsevier, vol. 107(C).
    2. Ghadimi, Foad & Aouam, Tarik, 2021. "Planning capacity and safety stocks in a serial production–distribution system with multiple products," European Journal of Operational Research, Elsevier, vol. 289(2), pages 533-552.
    3. Klosterhalfen, Steffen T. & Willems, Sean P. & Dittmar, Daniel, 2023. "Safety stock placement in supply chains with expediting," European Journal of Operational Research, Elsevier, vol. 307(2), pages 745-757.
    4. Yazdani, Majid & Aouam, Tarik, 2023. "Shipment planning and safety stock placement in maritime supply chains with stochastic demand and transportation times," International Journal of Production Economics, Elsevier, vol. 263(C).

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