An Integrated Model for a Two-supplier Supply Chain with Uncertainty in the Supply

Abstract

The objective of this paper is to study an integrated two-supplier supply chain whose suppliers are unreliable. An unreliable supplier is alternative between available (ON) and (OFF) states which are considered to be independent exponential variables. The suppliers apply a continuous review policy and the retailer uses an adapted continuous review base on an(R,Q) policy. Transportation times are constant and lead times are non-zero random variables. The retailer faces independent Poisson demands. Using the idea of the one-for-one ordering policy, we implicitly incorporate the distribution function of the random delay for obtaining the value of the expected costs of system. Finally, resorting to a dozen of sample problems, we show that the average cost reduction in our inventory system is at least 3.69% and at most 36.95% comparing to the one with only one supplier.