Title: Analysis of a dual-source production-inventory problem with quantity constraints

Authors: Bin Zhou, John Wang, Ruiliang Yan

Addresses: College of Business and Public Administration, Kean University, Union, NJ 07083, USA. ' Department of Management and Information Systems, Montclair State University, 1 Normal Ave., Montclair, NJ 07043, USA. ' School of Business and Economics, Indiana University Northwest, Gary, IN 46408, USA

Abstract: In this paper, we study a production-outsourcing problem in which the firm has two supply sources. Demands are random variables and supply/production capacity is unlimited. We discuss the problem, analyse the firm|s sourcing strategies, and compute the policies. The policies are then evaluated through extensive simulation studies that aim to provide important insights with respect to the performance under varied demand and cost parameters as well as different service level requirements of the firm.

Keywords: inventories; production systems; outsourcing; supply chain management; SCM; dual-sources; quantity constraints; supply sources; demand parameters; random variables; production capacity; sourcing strategies; simulation studies; cost parameters; service level requirements; applied decision sciences.

DOI: 10.1504/IJADS.2011.038088

International Journal of Applied Decision Sciences, 2011 Vol.4 No.1, pp.1 - 15

Published online: 29 Sep 2014 *

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