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Article: Optimal order policies in assembly systems with random demand and random supplier delivery.
- Article from:
- IIE Transactions
- Article date:
- November 1, 1996
- Author:
CopyrightCOPYRIGHT 1996 Institute of Industrial Engineers, Inc. (IIE). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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1. Introduction and description of the problem
With the growing popularity of 'Just-in-time' (JIT) supply and an increasing awareness of the benefits of close buyer-supplier relationships, many purchasing firms are reducing their supplier base. However, in many situations, diversification is necessary to hedge against the failure of some suppliers to deliver quality products in a timely manner. Facing the potential risk of being held to 'ransom' by a single supplier, many industries source most of the parts from two or three suppliers (Treleven and Schweikhart, 1988; Newman, 1989; McMillan, 1990).
In this paper, we assume that a pool of eligible suppliers has ...