IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v35y1999i1p11-23.html
   My bibliography  Save this article

Dual sourced supply chains: the discount supplier option

Author

Listed:
  • Ganeshan, Ram
  • Tyworth, John E.
  • Guo, Yuanming

Abstract

In this paper, we examine the dynamics of a supply chain that has the option of using two suppliers - one reliable, and the other unreliable. We characterize the unreliable supplier with long lead-time mean and variance. Although the use of the unreliable supplier might potentially warrant higher inventory and transportation costs, it is attractive because of the willingness of the supplier to provide a discount on the purchase price. We analyze the cost economics of two suppliers in a broader inventory-logistics framework, one that includes in-transit inventories and transportation costs. In this broader perspective, we provide a simple heuristic and sample exchange curves to determine: (i) if the order should be split between the suppliers; and (ii) if the order is split, the amount of discount and the fraction ordered to the secondary supplier to make order-splitting a worth-while policy. ©

Suggested Citation

  • Ganeshan, Ram & Tyworth, John E. & Guo, Yuanming, 1999. "Dual sourced supply chains: the discount supplier option," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 35(1), pages 11-23, March.
    • Handle: RePEc:eee:transe:v:35:y:1999:i:1:p:11-23
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554598000209
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Niu, Baozhuang & Dong, Jian & Liu, Yaoqi, 2021. "Incentive alignment for blockchain adoption in medicine supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    2. Zeinab Sazvar & Mohammad Reza Akbari Jokar & Armand Baboli, 2014. "A new order splitting model with stochastic lead times for deterioration items," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(9), pages 1936-1954, September.
    3. Riezebos, Jan, 2006. "Inventory order crossovers," International Journal of Production Economics, Elsevier, vol. 104(2), pages 666-675, December.
    4. Pérez, Cinthia & Geunes, Joseph, 2014. "A (Q,R) inventory replenishment model with two delivery modes," European Journal of Operational Research, Elsevier, vol. 237(2), pages 528-545.
    5. Wout Dullaert & Bert Vernimmen & El‐houssaine Aghezzaf & Birger Raa, 2006. "Revisiting Service‐level Measurement for an Inventory System with Different Transport Modes," Transport Reviews, Taylor & Francis Journals, vol. 27(3), pages 273-283, July.
    6. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    7. Kawtummachai, Ruengsak & Van Hop, Nguyen, 2005. "Order allocation in a multiple-supplier environment," International Journal of Production Economics, Elsevier, vol. 93(1), pages 231-238, January.
    8. Hsieh, Chung-Chi & Wu, Cheng-Han, 2009. "Coordinated decisions for substitutable products in a common retailer supply chain," European Journal of Operational Research, Elsevier, vol. 196(1), pages 273-288, July.
    9. Cheaitou, Ali & van Delft, Christian, 2013. "Finite horizon stochastic inventory problem with dual sourcing: Near myopic and heuristics bounds," International Journal of Production Economics, Elsevier, vol. 143(2), pages 371-378.
    10. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:35:y:1999:i:1:p:11-23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.