Development of an inventory model for two suppliers with random capacity considering supply disruption

Abstract

Supply disruption occurs for diverse reasons including transportation problem, equipment failure, raw material shortages, natural calamities etc. As a result supplier may become unavailable at random times for random time length. In addition, suppliers may also have random capacities leading to uncertain yield in orders. Again under random supplier capacities, the retailer should order from a number of suppliers in order to diversify the risk associated with shortages. The objective of this paper is to develop an inventory model for two suppliers with random capacities considering supply disruption. A modified (Q, r) model is developed to tackle the problem of future supply uncertainty in response to the demand generated by Poisson process. Two suitable optimisation algorithms are applied to search for the optimal values of the decision variables which are state dependent order quantities and reorder point to minimise the cost per unit time. A hypothetical example and its solution are then provided to have a better understanding about the demonstration of the proposed model. Finally, sensitivity analysis is also carried out to have better insights about the model developed.

A supply chain disruption risk mitigation model to manage COVID-19 pandemic risk

“…Also, from the observation of recent literature, we can see that most of the studies considered disruptions only at one end. Researchers like Ahmed et al (2017), J. Chen et al (2012), Hishamuddin et al (2012), Konstantaras et al (2019), Paul et al (2018), andSnyder et al (2016) discussed models considering disruptions only at the supplier's end.…”

“…Now, we define the length of cycle T 00 . From the research of Ahmed et al (2017), we can define T i0 = E (time at the beginning of the next cycle from the time when inventory drops to r at state i = 0, 1, 2, 3 and q units are ordered in case of state 0). Then,…”

A multi-stage supply chain disruption mitigation strategy considering product life cycle during COVID-19

“…A number of scholars have proposed recovery strategies for supply chain disruptions (Ivanov et al 2017 ). Ahmed et al ( 2017 ) developed an inventory model for sourcing from multiple suppliers considering the uncertainty of supply time as well as supply capacity in case of supply disruption. Xia et al ( 2010 ) proposed a two-stage generic production and inventory disruption recovery model, which takes into account the cost of deviation from the normal schedule after recovery and introduces the concept of disruption recovery time window.…”