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Dual Sourcing Policy for a Continuous-Review Stochastic Inventory System
Cao, Ping1; Yao, Dacheng2,3
2019-07-01
Source PublicationIEEE TRANSACTIONS ON AUTOMATIC CONTROL
ISSN0018-9286
Volume64Issue:7Pages:2921-2928
AbstractWe study a continuous-review inventory system with dual sourcing modes and Brownian motion demand. The regular order is from one supplier at some constant rate with a low unit cost while the expedite order is from the other one with a fixed setup cost and an expensive unit cost. With usual holding/shortage cost, the system's objective is to choose a regular constant order rate and an expedite replenishment policy such that the long-run average cost is minimized. We show that the regular ordering rate must be strictly less than the expected demand rate and an optimal expedite ordering policy is the well-known (s, S) policy. In particular, based on the theoretical analysis, we give a computational algorithm to demonstrate how to find the optimal regular ordering rate lambda* and expedite policy parameters s* and S*. Finally, using the algorithm, we investigate the effects of system's parameters on the optimal policy parameters and value of dual sourcing by numerical studies.
KeywordBrownian motion demand dual sourcing inventory control setup cost (s, S) policy
DOI10.1109/TAC.2018.2872205
Language英语
Funding ProjectNational Science Foundation of China[11771432] ; National Science Foundation of China[71771202] ; National Science Foundation of China[71520107002]
WOS Research AreaAutomation & Control Systems ; Engineering
WOS SubjectAutomation & Control Systems ; Engineering, Electrical & Electronic
WOS IDWOS:000473489700023
PublisherIEEE-INST ELECTRICAL ELECTRONICS ENGINEERS INC
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Document Type期刊论文
Identifierhttp://ir.amss.ac.cn/handle/2S8OKBNM/35146
Collection应用数学研究所
Affiliation1.Univ Sci & Technol China, Sch Management, Hefei 230026, Anhui, Peoples R China
2.Chinese Acad Sci, Acad Math & Syst Sci, Inst Appl Math, Beijing 100190, Peoples R China
3.Chinese Acad Sci, MADIS, Beijing 100190, Peoples R China
Recommended Citation
GB/T 7714
Cao, Ping,Yao, Dacheng. Dual Sourcing Policy for a Continuous-Review Stochastic Inventory System[J]. IEEE TRANSACTIONS ON AUTOMATIC CONTROL,2019,64(7):2921-2928.
APA Cao, Ping,&Yao, Dacheng.(2019).Dual Sourcing Policy for a Continuous-Review Stochastic Inventory System.IEEE TRANSACTIONS ON AUTOMATIC CONTROL,64(7),2921-2928.
MLA Cao, Ping,et al."Dual Sourcing Policy for a Continuous-Review Stochastic Inventory System".IEEE TRANSACTIONS ON AUTOMATIC CONTROL 64.7(2019):2921-2928.
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