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Inventory control in a multi-supplier system
Arda, Yasemin; Hennet, Jean-Claude
2004In IGLS 04, 13th International Working Seminar on Production Economics, Igls/Innsbruck, Austria, 16-20 February 2004
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Keywords :
inventory control; supply chains; stochastic models
Abstract :
[en] An enterprise network is analyzed from the viewpoint of an end-product manufacturer who receives customer orders and organises his production and supply policy so as to minimize the sum of his average holding cost and average stock-out cost. For each main component to be ordered, the producer has several possible suppliers. The arrivals of customers’ orders are random and delivery times from suppliers are also supposed random. This supply system is represented as a queuing network and the producer uses a base-stock inventory control policy that keeps constant the position inventory level (current inventory level + pending replenishment orders). The decision variables are the reference position inventory level and the percentages of orders sent to the different suppliers. In the queuing network model, the percentages of orders are implemented as Bernoulli branching parameters. A close-form expression of the expected cost criterion is obtained as a complex non-linear function of decision variables. A decomposed approach is proposed for solving the optimization problem in an approximate manner. The quality of the approximate solution is evaluated by comparison to the exact solution, which can be computed numerically in some simple cases, in particular in the two-supplier case. Numerical applications show the important economic advantage for the producer of sending orders to several suppliers rather than to a single one.
Disciplines :
Production, distribution & supply chain management
Author, co-author :
Arda, Yasemin  ;  Université de Liège - ULiège > HEC-Ecole de gestion : UER > UER Opérations : Supply Chain Management
Hennet, Jean-Claude;  Laboratoire des Sciences de l'Information et des Systèmes (LSIS) de Marseille
Language :
English
Title :
Inventory control in a multi-supplier system
Publication date :
16 February 2004
Event name :
IGLS 04, 13th International Working Seminar on Production Economics
Event place :
Igls, Austria
Event date :
16-20 February 2004
Audience :
International
Main work title :
IGLS 04, 13th International Working Seminar on Production Economics, Igls/Innsbruck, Austria, 16-20 February 2004
Peer reviewed :
Peer reviewed
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since 11 May 2012

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