In this paper, we study a production-outsourcing problem in which the firm has two supply sources. Demands are random variables and supply/production capacity is unlimited. We discuss the problem, analyse the firm's sourcing strategies, and compute the policies. The policies are then evaluated through extensive simulation studies that aim to provide important insights with respect to the performance under varied demand and cost parameters as well as different service level requirements of the firm.
|Number of pages
|International Journal of Applied Decision Sciences
|Published - 1 Jan 2011
- Inventory and production system
- Supply chain management