We describe a periodic review inventory system where emergency orders, which have a shorter supply lead time but are subject to higher ordering cost compared to regular orders, can be placed on a continuous basis. We consider the periodic review system in which the order cycles are relatively long so that they are possibly larger than the supply lead times. Study of such systems is important since they are often found in practice. We assume that the difference between the regular and emergency supply lead times is less than the order-cycle length. We develop a dynamic programming model and derive a stopping rule to end the computation and obtain optimal operation parameters. Computational results are included that support the contention that easily implemented policies can be computed with reasonable effort.

The use of a single vendor for each inventoried item is usually assumed in most of the inventory models. However, there are situations where the use of more than one vendor should be considered, especially when lead times are stochastic. This research presents a theoretical investigation of the effect of cost structures on the relative performance of sole‐sourcing versus dual‐sourcing inventory control policies. We show that except for cases where the ordering cost is high, the lead‐time variability is low, or the customer service level is low, dual sourcing performs better than sole sourcing under the normally distributed demand and shifted‐exponential lead times. Moreover, the computational results indicate the dual sourcing provides a better service level than sole sourcing at the optimal solutions, and that dual sourcing results in larger order quantities than sole sourcing, which suggests that attractive quantity discounts may not be in jeopardy when dual sourcing is employed. Finally, because it is generally known that multiple sourcing can enhance the competition among suppliers, material managers should consider splitting purchase orders when two equally qualified suppliers are available. © 1994 John Wiley & Sons, Inc.

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Most research on order splitting have focused on the reduction of safety stock in the multiple sourcing setting. Moreover, all works study the use of order splitting for the continuous review inventory systems. In this paper, we investigate the possibility of the multiple-delivery arrangement in the sole sourcing environment. In addition, we concentrate on the reduction of cycle stock for periodic review systems. We show that splitting an order into multiple deliveries can signi"cantly reduce the total cost especially if the cost of despatching an order for an item is not small. Although the use of information technology such as EDI decreases the ordering cost and thus shortens the period length, order splitting remains a cost-e!ective approach as long as the cost of despatching an order is not close to zero.2001 Elsevier Science B.V. All rights reserved.

In today's globalization competition, manufacturing firms are using an order fulfillment system to give available-topromise (ATP) capacity efficiently. An ordinary order fulfillment system will plan capacity based on forecasts and assign ATP quotas to incoming orders. Its basic idea is to enhance capacity utilization and avoid poor customer service. However, in the semiconductor industry, demand is highly volatile, and a maketo-order (MTO) manufacturer often runs the risk of cancelled committed demands. In this research, we propose an integrated order fulfillment model for a MTO semiconductor foundry fab to maximize corporate profit. Specifically, we suggest a periodic allocation review mechanism to reallocate unused ATP quotas. We examine the model performance based on different data sets. Results showed that capacity utilization and profitability are improved substantially with the periodic review mechanism, especially when demand forecast is not reliable.Index Terms-Available-to-promise, linear programming, management information systems, order fulfillment, production management.