On “Sourcing Decisions with Stochastic Supplier Reliability and Stochastic Demand”
Production and Operations Management · 2018 · Volume 27 · Issue 2
Abstract
This note complements the study of Burke, Carillo and Vakharia (hereafter referred to as “BCV model”), which investigates the implications of unreliable supplies on a firm's sourcing decisions under uniformly distributed demand. First, I present a sufficient condition under which the optimal quantity ordered from each supplier corresponds to the solution derived as BCV. Second, a heuristics is developed for the BCV model when the sufficient condition is not satisfied, and conduct numerical experiments to investigate the performance of the BCV solution when the optimality conditions fail.
Keywords
random yield, supplier diversification, supply chain management
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