A Note on 'Sourcing Decisions with Stochastic Supplier Reliability and Stochastic Demand'


Production and Operations Management

octobre 2015, vol. 24, n°10, pp.1636-1639

Départements : Information Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Sourcing, Supplier selection, Random yield

This note complements the study of Burke, Carillo, and Vakharia (2009 hereafter “BCV”) which analyzes a class of single-product multisourcing problems under stochastic demand and random yields. The purpose is twofold. First, we prove that the objective function used by these authors is only a lower bound for the expected profit for which we provide the correct expression. Second, we show on some of the numerical instances provided in BCV's study that the structure and the performance of the BCV ordering policy may be substantially different from the optimal ordering policy. We conclude by giving general qualitative insights characterizing suboptimality of the BCV solution