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Optimal Product Substitution and Dual Sourcing Strategy considering Reliability of Production Lines

Author

Listed:
  • Wu, Di
  • Gong, Min
  • Peng, Rui
  • Yan, Xiangbin
  • Wu, Shaomin

Abstract

Most of the supply chain literature assumes that product substitution is an effective method to mitigate supply chain disruptions and that all production lines either survive or are disrupted together. Such assumptions, however, may not hold in the real world: (1) when there is a shortfall of all products, product substitution may be inadequate unless it is paired with other strategies such as dual sourcing; and (2) production lines do not survive forever and may fail. To relax such assumptions, this paper therefore investigates the situations that the manufacturer may optimize substitution policy and dual sourcing policy to cope with supply chain disruptions. The paper obtains and compares the optimal policies for both deterministic and stochastic demands. A real-world case is also studied to verify the effectiveness of the proposed model.

Suggested Citation

  • Wu, Di & Gong, Min & Peng, Rui & Yan, Xiangbin & Wu, Shaomin, 2020. "Optimal Product Substitution and Dual Sourcing Strategy considering Reliability of Production Lines," Reliability Engineering and System Safety, Elsevier, vol. 202(C).
  • Handle: RePEc:eee:reensy:v:202:y:2020:i:c:s095183202030538x
    DOI: 10.1016/j.ress.2020.107037
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    Citations

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    Cited by:

    1. Moghadasi, Negin & Collier, Zachary A. & Koch, Andrew & Slutzky, David L. & Polmateer, Thomas L. & Manasco, Mark C. & Lambert, James H., 2022. "Trust and security of electric vehicle-to-grid systems and hardware supply chains," Reliability Engineering and System Safety, Elsevier, vol. 225(C).
    2. Yue, Xiongping & Mu, Dong & Wang, Chao & Ren, Huanyu & Peng, Rui & Du, Jianbang, 2024. "Critical risks in global supply networks: A static structure and dynamic propagation perspective," Reliability Engineering and System Safety, Elsevier, vol. 242(C).
    3. Zhang, Chao & Chen, Rentong & Wang, Shaoping & Dui, Hongyan & Zhang, Yadong, 2022. "Resilience efficiency importance measure for the selection of a component maintenance strategy to improve system performance recovery," Reliability Engineering and System Safety, Elsevier, vol. 217(C).
    4. Ma, Ye & Chi, Yuanying & Wu, Di & Peng, Rui & Wu, Shaomin, 2021. "Reliability of integrated electricity and gas supply system with performance substitution and sharing mechanisms," Reliability Engineering and System Safety, Elsevier, vol. 212(C).
    5. Rui Yan & Haotong Tian & Kaiye Gao & Rui Peng & Bin Liu, 2023. "A two-stage UAV routing problem with time window considering rescheduling with random delivery reliability," Journal of Risk and Reliability, , vol. 237(4), pages 781-797, August.

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