The single period procurement problem where dedicated supplier capacity can be reserved

The single period procurement problem where dedicated supplier capacity can be reserved

0.00 Avg rating0 Votes
Article ID: iaor1996456
Country: United States
Volume: 42
Issue: 6
Start Page Number: 915
End Page Number: 934
Publication Date: Sep 1995
Journal: Naval Research Logistics
Authors: ,
Abstract:

In this article the authors consider the single period procurement strategy for an item with uncertainty in its demand and uncertainty in the capacity of the supplier. Dedicated capacity can be ensured by paying a premium charge to the supplier. The other decision variable is the replenishment quantity to request. It turns out to be very easy to select the best value of this latter quantity. On the other hand, the authors are only able to characterize the general behavior of the expected profit as a function of the level of dedicated capacity. In general, there can be multiple local maxima as a function of the dedicated capacity. However, for the special, but important, case of normally distributed demand, normally distributed capacity and a linear cost for reserving capacity, an algorithm is developed for finding the best level of dedicated capacity. Some preliminary insights regarding the extension to multiple periods are presented.

Reviews

Required fields are marked *. Your email address will not be published.