Robust Dual Sourcing Inventory Management: Optimality of Capped Dual Index Policies and Smoothing

Asymptotic Optimality of Tailored Base-Surge Policies in Dual-Sourcing Inventory Systems

Dual-sourcing inventory systems, in which one supplier is faster (i.e. express) and more costly, while the other is slower (i.e. regular) and cheaper, arise naturally in many real-world supply chains. These systems are notoriously difficult to optimize due to the complex structure of the optimal solution and the curse of dimensionality, having resisted solution for over 40 years. Recently, so-c...

Global Dual Sourcing and Order Smoothing

Motivated by the recent trend of offshoring manufacturing facilities to seek lower production cost, while keeping some costly local facilities to better respond to changes in market demand, this paper studies a dual sourcing policy and characterizes the average sourcing allocation. We consider the total landed cost from origin (combining a cheap but slow source and a fast but expensive source) ...

Analysis of Tailored Base-Surge Policies in Dual Sourcing Inventory Systems

We study a model of a firm managing its inventory of a single product by sourcing supplies from two supply sources, a regular supplier who offers a lower unit cost and a longer lead time than a second, emergency, supplier. A practically implementable policy for such a firm is a Tailored Base-Surge (TBS) Policy (Allon and Van Mieghem, 2010) to manage its inventory: Under this policy, the firm pr...

Optimal Policies for a Dual-Sourcing Inventory Problem with Endogenous Stochastic Lead Times

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