Purpose Due to uncertainty in supply chains caused by the coronavirus disease 2019 (COVID-19), organizations are adjusting their supply chain design to address challenges faced during the pandemic. To safeguard their operations against disruption in order quantities, supply chain members have been looking for alternate suppliers. This paper considers a two-level supply chain consisting of a manufacturer and two suppliers of a certain type of components required for the production of a finished product. The primary supplier (supplier A) is unreliable, in the sense that the quantity delivered is usually less than the ordered quantity. The proportion of the ordered quantity delivered by supplier A is a random variable with a known probability distribution. The secondary supplier (supplier B) always delivers the order in its entirety at a higher cost and can respond instantaneously. In order for supplier B to respond instantaneously, the manufacturer is required to reserve a certain quantity at an additional cost. Once the quantity received from the main supplier is observed, the manufacturer may place an order not exceeding the reserved quantity. Design/methodology/approach A mathematical model describing the production/inventory situation of the supply chain is formulated. The model allows the determination of the manufacturer's optimal ordering policy. Findings An expression for the expected total cost per unit time function is derived. The optimal solution is determined by solving a system of nonlinear equations obtained by minimizing the expected total cost function. Practical implications The proposed model can be used by supply chain managers aiming at identifying various ways of handling the uncertainty in the flow of supplies across the chain. Originality/value This proposed model addresses a gap in the production/inventory literature.
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Univ Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, EnglandUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Brandon-Jones, Emma
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Squire, Brian
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Univ Bath, Sch Management, Bath BA2 7AY, Avon, EnglandUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Squire, Brian
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Autry, Chad W.
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Univ Tennessee, Knoxville, TN USAUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Autry, Chad W.
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Petersen, Kenneth J.
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Univ Tennessee, Knoxville, TN USAUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
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Hong Kong Polytech Univ, Hung Hom, Inst Text & Clothing, Kowloon, Hong Kong, Peoples R ChinaHong Kong Polytech Univ, Hung Hom, Inst Text & Clothing, Kowloon, Hong Kong, Peoples R China
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Midnapore Coll Autonomous, Dept Math, UG Unit, Paschim Medinipur 721101, W Bengal, India
Midnapore Coll Autonomous, Dept Math, PG Unit, Paschim Medinipur 721101, W Bengal, IndiaMidnapore Coll Autonomous, Dept Math, UG Unit, Paschim Medinipur 721101, W Bengal, India
机构:
Univ Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, EnglandUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Brandon-Jones, Emma
;
Squire, Brian
论文数: 0引用数: 0
h-index: 0
机构:
Univ Bath, Sch Management, Bath BA2 7AY, Avon, EnglandUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Squire, Brian
;
Autry, Chad W.
论文数: 0引用数: 0
h-index: 0
机构:
Univ Tennessee, Knoxville, TN USAUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
Autry, Chad W.
;
Petersen, Kenneth J.
论文数: 0引用数: 0
h-index: 0
机构:
Univ Tennessee, Knoxville, TN USAUniv Manchester, Manchester Business Sch, Manchester M13 9PL, Lancs, England
机构:
Hong Kong Polytech Univ, Hung Hom, Inst Text & Clothing, Kowloon, Hong Kong, Peoples R ChinaHong Kong Polytech Univ, Hung Hom, Inst Text & Clothing, Kowloon, Hong Kong, Peoples R China
机构:
Midnapore Coll Autonomous, Dept Math, UG Unit, Paschim Medinipur 721101, W Bengal, India
Midnapore Coll Autonomous, Dept Math, PG Unit, Paschim Medinipur 721101, W Bengal, IndiaMidnapore Coll Autonomous, Dept Math, UG Unit, Paschim Medinipur 721101, W Bengal, India