A single period inventory model with multiple vendors and random yield

Abstract

ABSTRACT Inventory management requires handling uncertainties arising at procurement and pro duction stages, transportation channels and demand attributes effectively and efficiently in order to have a robust operational control. In this thesis, a single period inventory model with unreliable suppliers and uncertain demand is analyzed. Supplier unreliability is mod eled by stochastic proportions and/or random supplier capacity in related literature. We combine these two approaches where a stochastic proportion is applied to the minimum of the order amount and random supplier capacity. There are studies in the literature on ran dom yield that primarily consider models with only a single vendor. The main contribution of this work is the extension to the case where there are multiple vendors. We consider cases involving distinct and identical servers to discuss a number of issues including order diver sification. We show that the optimal ordering policy does not have a simple order-up-to or base stock structure. A number of numerical illustrations are given to discuss the structure of optimal policies. IV