Decreasing expected shortages through order splitting

Decreasing expected shortages through order splitting

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Article ID: iaor19911259
Country: Netherlands
Volume: 19
Issue: 1/3
Start Page Number: 189
End Page Number: 195
Publication Date: May 1990
Journal: Engineering Costs and Production Economics
Authors: ,
Abstract:

In this paper the authors consider the policy of splitting each replenishment order among two or more vendors. This action reduces the expected time until the first replenishment arrives, as well as its variance. Thus using the same safety stock, a higher service level can be achieved or the safety stock can be reduced without decreasing the service level. The authors calculate these achievements using the expected shortage level as the service measure.

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