An EOQ model with multiple suppliers and random capacity

Date
2006
Authors
Erdem, A. S.
Fadıloğlu, M. M.
Özekici, S.
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Source Title
Naval Research Logistics
Print ISSN
0894-069X
Electronic ISSN
1520-6750
Publisher
Volume
53
Issue
1
Pages
101 - 114
Language
English
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Abstract

We consider an EOQ model with multiple suppliers that have random capacities, which leads to uncertain yield in orders. A given order is fully received from a supplier if the order quantity is less than the supplier's capacity; otherwise, the quantity received is equal to the available capacity. The optimal order quantities for the suppliers can be obtained as the unique solution of an implicit set of equations in which the expected unsatisfied order is the same for each supplier. Further characterizations and properties are obtained for the uniform and exponential capacity cases with discussions on the issues related to diversification among suppliers.

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Published Version (Please cite this version)