Unexplored Costs of Random Order Crossover in Supply Chains

Studies have shown that random order crossover helps reduces the risk of an out-of-stock event when an order that was issued later arrives earlier to offset the late arrival of an order issued earlier. The current school of thought is that, although such crossovers create complexities from a modeling perspective, they are surprisingly beneficial in practice since they decrease the realized lead-time variability. Unlike all previous work, which has focused on the realized lead-time distribution produced by random order crossover and its benefits, this study explores the potential costs of random crossover in supply chains. The results warrant the hypothesis that random order crossover is likely to create more costs than benefits.