An EOQ model with multiple suppliers and random capacity

An EOQ model with multiple suppliers and random capacity

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Article ID: iaor20072725
Country: United States
Volume: 53
Issue: 1
Start Page Number: 101
End Page Number: 114
Publication Date: Feb 2006
Journal: Naval Research Logistics
Authors: , ,
Keywords: supply & supply chains
Abstract:

We consider an EOQ model with multiple suppliers that have random capacities, which leads to uncertain yield in orders, A given order is fully received from a supplier if the order quantity is less than the supplier's capacity; otherwise, the quantity received is equal to the available capacity. The optimal order quantities for the suppliers can be obtained as the unique solution of an implicit set of equations in which the expected unsatisified order is the same for each supplier. Further characterizations and properties are obtained for the uniform and exponential capacity cases with discussions on the issues related to diversification among suppliers.

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