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A Note on “Sourcing Decisions with Stochastic Supplier Reliability and Stochastic Demand”
Author(s) -
Delft Christian,
Vial JeanPhilippe
Publication year - 2015
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/poms.12354
Subject(s) - computer science , mathematical economics , product (mathematics) , profit (economics) , upper and lower bounds , class (philosophy) , mathematical optimization , operations research , microeconomics , economics , mathematics , mathematical analysis , geometry , artificial intelligence
This note complements the study of Burke, Carillo, and Vakharia ([Burke, G, 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.