Dual sourcing models with stock-out dependent substitution

dc.authoridHekimoglu, Mustafa/0000-0001-9446-0582
dc.contributor.authorHekimoğlu, Mustafa
dc.contributor.authorScheller-Wolf, Alan
dc.date.accessioned2023-10-19T15:11:37Z
dc.date.available2023-10-19T15:11:37Z
dc.date.issued2023
dc.department-temp[Hekimoglu, Mustafa] Kadir Has Univ, Dept Ind Engn, Hisaralti Cad 17, TR-34083 Istanbul, Turkiye; [Scheller-Wolf, Alan] Carnegie Mellon Univ, Tepper Sch Business, 5000 Forbes Ave, Pittsburgh, PA 15213 USAen_US
dc.description.abstractCompanies use different criteria such as lead time, cost and quality to evaluate suppliers; often using multiple suppliers with the aim of reducing stockout risk. But in many industries there may be significant differences between the quality levels of different suppliers. Thus quality-sensitive companies may prefer an item from a primary supplier, but be forced to accept substitute products of lesser quality in case of a stock-out. Motivated by an example in the aviation industry, we introduce a Dual Sourcing problem With Stock-out dependent substitution (DSWS) which includes quality differences. Due to nonconvexity of the multi-period model, analytical characterization of the optimal policy appears intractable. To overcome this problem, we prove a relation between the optimal cost of DSWS and costs of three other problems -dual sourcing without substitution and single sourcing problems with and without backlogging. This leads us to propose the use of the dual index policy (and a variant) as heuristics for DSWS, and to develop an algorithm for parameter optimization of our heuristics. Extensive numerical experiments show that the dual index policy outperforms all other candidate solutions from the literature by at least 8%. Our experiments show that the utilization of the back-up supplier leads to substantial cost savings and service rate increase, especially in case of high differences between holding cost rates of different quality items.& COPY; 2023 Elsevier B.V. All rights reserved.en_US
dc.identifier.citation2
dc.identifier.doi10.1016/j.ejor.2023.04.029en_US
dc.identifier.endpage485en_US
dc.identifier.issn0377-2217
dc.identifier.issn1872-6860
dc.identifier.issue2en_US
dc.identifier.scopus2-s2.0-85160102802en_US
dc.identifier.scopusqualityQ1
dc.identifier.startpage472en_US
dc.identifier.urihttps://doi.org/10.1016/j.ejor.2023.04.029
dc.identifier.urihttps://hdl.handle.net/20.500.12469/5133
dc.identifier.volume311en_US
dc.identifier.wosWOS:001031778800001en_US
dc.identifier.wosqualityQ1
dc.khas20231019-WoSen_US
dc.language.isoenen_US
dc.publisherElsevieren_US
dc.relation.ispartofEuropean Journal of Operational Researchen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.subjectLateral TransshipmentsEn_Us
dc.subjectInventory ModelsEn_Us
dc.subjectStochastic DemandEn_Us
dc.subjectOptimal PoliciesEn_Us
dc.subjectStrategiesEn_Us
dc.subjectManagementEn_Us
dc.subjectOptimalityEn_Us
dc.subjectSystemEn_Us
dc.subjectLateral Transshipments
dc.subjectInventory Models
dc.subjectStochastic Demand
dc.subjectOptimal Policies
dc.subjectInventoryen_US
dc.subjectStrategies
dc.subjectDual sourcingen_US
dc.subjectManagement
dc.subjectSubstitutionen_US
dc.subjectOptimality
dc.subjectOptimal policyen_US
dc.subjectSystem
dc.subjectQualityen_US
dc.titleDual sourcing models with stock-out dependent substitutionen_US
dc.typeArticleen_US
dspace.entity.typePublication
relation.isAuthorOfPublication533132ce-5631-4068-91c5-2806df0f65bb
relation.isAuthorOfPublication.latestForDiscovery533132ce-5631-4068-91c5-2806df0f65bb

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