A heuristic based on quadratic approximation for dual sourcing problem with general lead times and supply capacity uncertainty

References

• Allon, G. and van Mieghem, J.A. (2010) Global dual sourcing: Tailored base-surge allocation to near-and offshore production. Management Science, 56, 110–124.
   Web of Science ®Google Scholar
• Barankin, E.W. (1961) A delivery-lag inventory model with an emergency provision (the single-period case). Naval Research Logistics Quarterly, 8, 285–311.
   Google Scholar
• Bertsekas, D.P. and Tsitsiklis, J.N. (1996) Neuro-dynamic Programming (Vol. 5), pp. 15–23. Athena Scientific, Belmont, Massachusetts.
   Google Scholar
• Brown, D.B., Smith, J.E. and Sun, P. (2010) Information relaxations and duality in stochastic dynamic programs. Operations Research, 58, 785–801.
   Web of Science ®Google Scholar
• Canis, B. (2011) Motor Vehicle Supply Chain: Effects of the Japanese Earthquake and Tsunami, Diane Publishing, Pennsylvania.
   Google Scholar
• Chen, W., Feng, Q. and Seshadri, S. (2013) Sourcing from suppliers with random yield for price-dependent demand. Annals of Operations Research, 208, 557–579.
   Web of Science ®Google Scholar
• Chen, X., Gao, X. and Pang, Z. (2018) Preservation of structural properties in optimization with decisions truncated by random variables and its applications. Operations Research, 66, 340–357.
   Web of Science ®Google Scholar
• Ciarallo, F.W., Akella, R. and Morton, T.E. (1994) A periodic review, production planning model with uncertain capacity and uncertain demand optimality of extended myopic policies. Management Science, 40, 320–332.
   Web of Science ®Google Scholar
• Daniel, K.H. (1963) A delivery-lag inventory model with emergency. Multistage Inventory Models and Techniques 32–46. Stanford University Press, Stanford, California.
   Google Scholar
• De Farias, D.P. and van Roy, B. (2003) The linear programming approach to approximate dynamic programming. Operations Research, 51, 850–865.
   Web of Science ®Google Scholar
• De Farias, D.P. and van Roy, B. (2004) On constraint sampling in the linear programming approach to approximate dynamic programming. Mathematics of Operations Research, 29, 462–478.
   Web of Science ®Google Scholar
• Farias, V.F. and van Roy, B. (2006) Tetris: A study of randomized constraint sampling, in Probabilistic and Randomized Methods for Design Under Uncertainty, pp. 189–201. Springer, London.
   Google Scholar
• Federgruen, A. and Yang, N. (2008) Selecting a portfolio of suppliers under demand and supply risks. Operations Research, 56, 916–936.
   Web of Science ®Google Scholar
• Federgruen, A. and Yang, N. (2011) Procurement strategies with unreliable suppliers. Operations Research, 59, 1033–1039.
   Web of Science ®Google Scholar
• Feng, Q. (2010) Integrating dynamic pricing and replenishment decisions under supply capacity uncertainty. Management Science, 56, 2154–2172.
   Web of Science ®Google Scholar
• Feng, Q. and Shanthikumar, J.G. (2017) Supply and demand functions in inventory models. Operations Research, 66, 77–91.
   Web of Science ®Google Scholar
• Fukuda, Y. (1964) Optimal policies for the inventory problem with negotiable leadtime. Management Science, 10, 690–708.
   Web of Science ®Google Scholar
• Henig, M. and Gerchak, Y. (1990) The structure of periodic review policies in the presence of random yield. Operations Research, 38, 634–643.
   Web of Science ®Google Scholar
• Hua, Z., Yu, Y., Zhang, W. and Xu, X. (2015) Structural properties of the optimal policy for dual-sourcing systems with general lead times. IIE Transactions, 47, 841–850.
   Web of Science ®Google Scholar
• Huh, W.T., Janakiraman, G. and Nagarajan, M. (2011) Average cost single-stage inventory models: An analysis using a vanishing discount approach. Operations Research, 59, 143–155.
   Web of Science ®Google Scholar
• Janakiraman, G., Seshadri, S. and Sheopuri, A. (2014) Analysis of tailored base-surge policies in dual sourcing inventory systems. Management Science, 61, 1547–1561.
   Web of Science ®Google Scholar
• Klosterhalfen, S. and Kiesmüller Minner, S. (2011) A comparison of the constant-order and dual-index policy for dual sourcing. International Journal of Production Economics, 133, 302–311.
   Web of Science ®Google Scholar
• Murota, K. (2003) Discrete Convex Analysis. SIAM, Philadelphia, PA.
   Google Scholar
• Powell, W.B. (2007) Approximate Dynamic Programming: Solving the Curses of Dimensionality, John Wiley & Sons, New York
   Google Scholar
• Puterman, M.L. (2014) Markov Decision Processes: Discrete Stochastic Dynamic Programming, John Wiley & Sons, New York.
   Google Scholar
• Scheller-Wolf, A., Veeraraghavan, S. and van Houtum, G. (2007) Effective dual sourcing with a single index policy. Working paper, Carnegie Mellon University, Pittsburgh, PA.
   Google Scholar
• Sheopuri, A., Janakiraman, G. and Seshadri, S. (2010) New policies for the stochastic inventory control problem with two supply sources. Operations Research, 58, 734–745.
   Web of Science ®Google Scholar
• Sun, P., Wang, K. and Zipkin, P. (2014) Quadratic approximation of cost functions in lost sales and perishable inventory control problems. Working paper, Fuqua School of Business, Duke University, Durham, NC.
   Google Scholar
• Uster, H., Keskin, B.B. and Cetinkaya, S. (2008) Integrated warehouse location and inventory decisions in a three-tier distribution system. IIE Transactions, 40, 718–733.
   Web of Science ®Google Scholar
• Van Mieghem, J.A. (2008) Operations Strategy: Practices and Principles. Dynamic Ideas, Belmont, MA.
   Google Scholar
• Veeraraghavan, S. and Scheller-Wolf, A. (2008) Now or later: A simple policy for effective dual sourcing in capacitated systems. Operations Research, 56, 850–864.
   Web of Science ®Google Scholar
• Wang, Y. and Gerchak, Y. (1996) Periodic review production models with variable capacity, random yield, and uncertain demand. Management Science, 42, 130–137.
   Web of Science ®Google Scholar
• Whittemore, A.S. and Saunders, S.C. (1997) Optimal inventory under stochastic demand with two supply options. SIAM Journal on Applied Mathematics, 32, 293–305.
   Google Scholar
• Xin, L. and Goldberg, D.A. (2017) Asymptotic optimality of tailored base-surge policies in dual-sourcing inventory systems. Management Science, 64, 437–452.
   Web of Science ®Google Scholar