Are more suppliers better?: generalising the Guo and Ganeshan procedure

Abstract

In multiple supplier inventory models, where several suppliers are used to replenish the stock of one item, computation of mean and variance of supplier lead times requires the knowledge of the moments of order statistics from the parent lead time distribution. This article presents a general procedure of finding the moments of supplier lead times in multiple supplier inventory models. The procedure is based on using the Generalised Lambda Distribution (GLD) to approximate the lead time distribution. Numerical examples are provided to validate our procedure. The proposed procedure has the advantage that the computations involved are very simple and can be used for any continuous unimodal lead time distribution.

Keywords:

• inventory
• order statistics
• lead time