Impacts of supply disruptions and customer differentiation on a partial-backordering inventory system

Li, Xueiping; Chen, Yuerong

doi:10.1016/j.simpat.2009.12.010

Cited by 30 publications

(24 citation statements)

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“…Arreola-Risa and DeCroix (1998) extended a mathematical model for an inventory control problem under (s, S) policy with disruptions in supply and partial backordering. Li and Chen (2010) extend a supply chain model including a supplier, seller, and several end-users with partial backordering and disruption from the supplier's side in the supply process. Paul et al (2014) proposed a real-time recovery plan for cases when production disruptions in a two-stage and single-item batch production system occur and partial backordering is permitted.…”

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Lot‐sizing model with advance payment pricing and disruption in supply under planned partial backordering

Taleizadeh

2016

Int Trans Operational Res

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Inventory management is a group of policies used to enhance company efficiencies in using the inventory and decrease its related costs. Inventory management policies operate efficiently only in the normal market environment. When the manager faces disruption, the common decisions do not lead to optimality. In this paper, a lot-sizing model for when the retailer may face disruption is developed. A portion of purchasing cost should be spent before delivery by several predetermined equal-sized advanced payments; shortage is permitted and will be partially back-ordered. The total cost function includes purchasing, holding, capital, backordering, and lost sale costs. The optimal decisions are obtained after proving the convexity of the expected total cost function. Finally, a solution algorithm is presented and several numerical examples and analysis are provided to show that the developed model and derived results can be applied to real-world problems.Keywords: interruption; advance payment; price; partial backordering; lot sizing Literature reviewInventory management is a group of policies used to enhance company efficiencies in using the inventory and decrease its related costs. The main goal of each inventory control system is improving the total profits of firms without decreasing the customers' satisfaction and also service levels. This area has attracted significant investigation since 1913 when the first mathematical model was developed by Harris, although most of these studies were performed under a deterministic environment (Cárdenas-Barrón et al., 2014). On the other hand, usually the cost of an order is spent at delivery time, while prepayment for some special products is commonly requested from the supplier ensuring that the purchaser never cancels the order.Nowadays, a new aspect of real-world problems named "disruption" has attracted both researchers' and practitioners' attention. Recently, the rate at which mathematical models are C 2016 The Authors.

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Lot‐sizing model with advance payment pricing and disruption in supply under planned partial backordering

Taleizadeh

2016

Int Trans Operational Res

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“…Supply disruption will result in the loss of corporate interests and reputation, and decrease reliability of the downstream supply chain, and hence damage the sustainability of the supply chain. For example, Ericsson lost 400 million Euros after his main supplier's semiconductor plant caught fire in 2000, and Apple missed many customer orders during a supply shortage of Dynamic Random Access Memory(DRAM) chips after an earthquake hit Taiwan in 1999 (Li and Chen [2]). An unforeseen labor strike occurred in 2002, 29 ports on the West coast of the United States were shut down urgently, which led to the closure of the New United Motor Manufacturing production factory (Baghalian et al [3]).…”

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confidence: 99%

Optimal Order Policies for Dual-Sourcing Supply Chains under Random Supply Disruption

Yan

Kou

2019

Sustainability

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In this paper, we investigate inventory and order strategies of a two-echelon supply chain, which is composed of two unreliable suppliers that are subject to random disruption. We develop the gross weighted profit benchmark model and the service level constrained model of the supply chain, respectively. We derive the retailer's optimal order quantity and analyze the retailer' optimal order policy and also obtain the analytical closed-form solutions. In addition, some numerical examples are provided to illustrate the effect of disruption time, disruption probability and fill rate on the optimal decisions and expected profit.

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“…Simulation has been proven to be a useful tool for the analysis of dynamic systems. This technique has been used in the literature as a common tool to evaluate the impact of disruptions in complex supply chains (Deleris and Erhun, 2005;Schmitt and Singh, 2009;Snyder and Shen, 2006;Schmitt et al, 2010a;Li and Chen, 2010;Wilson, 2007;Keskin et al, 2010).…”

Section: Introductionmentioning

confidence: 99%

A Simulation Model of a Three Echelon Supply Chain System with Multiple Suppliers subject to Supply and Transportation Disruptions

2015

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A simulation study for a three stage supply chain system with multiple suppliers subject to unexpected disruptions is presented in this paper. Two types of disruptions were considered, namely supply and transportation disruption. The objective of this study is to examine the effects of disruption on the systems' total recovery costs and other performance measures. Various disruption scenarios were predefined by combining different disruption types and locations. Overall, transportation disruption with a damaged lot has more damaging effects to the whole supply chain compared to supply disruption, due to the higher lost sales quantity. In addition, back order quantity and recovery duration have a strong positive relationship to total recovery costs. The combined benefits of simulation and optimization have enabled an increased understanding of the impacts of random disruption events on the total system behaviour.

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Impacts of supply disruptions and customer differentiation on a partial-backordering inventory system

Cited by 30 publications

References 12 publications

Lot‐sizing model with advance payment pricing and disruption in supply under planned partial backordering

Lot‐sizing model with advance payment pricing and disruption in supply under planned partial backordering

Optimal Order Policies for Dual-Sourcing Supply Chains under Random Supply Disruption

A Simulation Model of a Three Echelon Supply Chain System with Multiple Suppliers subject to Supply and Transportation Disruptions

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