A Two-Supplier Inventory Model

F.B.S.L.P. Janssen, T. de Kok

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Abstract

In this paper we consider an inventory system with two suppliers.A supply agreement is made with one of the suppliers, to deliver a xed quantity Q every review period.The replenishment decisions for the other supplier are governed by a (R; S) replenishment policy; that is, when the inventory position at a review period is below the order-up-to level S, an order is placed at the second supplier such that the inventory position is raised up to S.In this paper an algorithm is developed for the determination of the decision parameters S and Q such that the total relevant costs are minimized, subject to a service level constraint; these costs are de ned as the sum of the holding, purchasing, and ordering costs.Based on the numerical results, conclusions follow about the division of the purchase volume among the two suppliers.
Original languageEnglish
Place of PublicationTilburg
PublisherOperations research
Number of pages12
Volume1996-95
Publication statusPublished - 1996

Publication series

NameCentER Discussion Paper
Volume1996-95

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Keywords

  • inventory models

Cite this

Janssen, F. B. S. L. P., & de Kok, T. (1996). A Two-Supplier Inventory Model. (CentER Discussion Paper; Vol. 1996-95). Operations research.