Optimal Ordering Policy in Dual-Supplier System with Unreliable Lead-Time and Minimum Lot Size

Abstract

In this paper, we investigate an optimal ordering policy in a dual-supplier system with forecast update when considering supplierpsilas unreliable lead-time and minimum lot size. It is showed that the optimal order quantity and expected profit of unreliable lead-time are smaller than those without uncertainty. The upper limits of supplierspsila minimum lot size that the manufacturer can accept are decreasing in the possibility of delay. Moreover, the unreliable lead-time reduces the feasibility of dual-supplier system.