Analysis of a dual sourcing inventory model with normal unit demand and Erlang mixture lead times

Duncan K.H. Fong, Virginia M. Gempesaw, J. Keith Ord

Research output: Contribution to journalArticlepeer-review

28 Scopus citations

Abstract

We consider an inventory model where two suppliers are used concurrently to replenish one stock item. The unit demand is assumed to be normally distributed and the supplier lead times are mixtures of Erlang distributions. The lead time distributions need not be identical. This paper presents closed form expressions to evaluate the means and variances of the effective lead times, the probability of no stockout at a fixed reorder level and the potential lost sales. When the lead times are not identical, at a comparable service level, it is possible to achieve a lower average stock level by using unequal order splits. Several data sets are used in the paper to illustrate the method.

Original languageEnglish (US)
Pages (from-to)97-107
Number of pages11
JournalEuropean Journal of Operational Research
Volume120
Issue number1
DOIs
StatePublished - Jan 1 2000

All Science Journal Classification (ASJC) codes

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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