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Optimal Product Substitution and Dual Sourcing Strategy considering Reliability of Production Lines

Wu, Di, Gong, Min, Peng, Rui, Yang, Xiangbin, Wu, Shaomin (2020) Optimal Product Substitution and Dual Sourcing Strategy considering Reliability of Production Lines. Reliability Engineering and System Safety, 202 . Article Number 107037. ISSN 0951-8320. (doi:10.1016/j.ress.2020.107037) (KAR id:81358)


Most of the supply chain literature assumes that product substitution is an effective method to mitigate supply chain disruptions and that all production lines either survive or are disrupted together. Such assumptions, however, may not hold in the real world: (1) when there is a shortfall of all products, product substitution may be inadequate unless it is paired with other strategies such as dual sourcing; and (2) production lines do not survive forever and may fail. To relax such assumptions, this paper therefore investigates the situations that the manufacturer may optimize substitution policy and dual sourcing policy to cope with supply chain disruptions. The paper obtains and compares the optimal policies for both deterministic and stochastic demands. A real-world case is also studied to verify the effectiveness of the proposed model.

Item Type: Article
DOI/Identification number: 10.1016/j.ress.2020.107037
Uncontrolled keywords: Reliability; dual sourcing; random supply failures; production lines; product substitution; supply chain disruption
Subjects: H Social Sciences > HA Statistics > HA33 Management Science
Divisions: Divisions > Kent Business School - Division > Department of Analytics, Operations and Systems
Depositing User: Shaomin Wu
Date Deposited: 24 May 2020 13:57 UTC
Last Modified: 23 May 2022 23:00 UTC
Resource URI: (The current URI for this page, for reference purposes)

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