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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