@book{bdfda97714f14553bb9cfe4c8bb2c60f,
title = "Approximate order-up-to policies for inventory systems with binomial yield",
abstract = "This paper studies an inventory policy for a retailer who orders his products from a supplier whose deliveries only partially satisfy the quality requirements. We model this situation by an infinite-horizon periodic-review model with binomial random yield and positive lead time. We propose an order-up-to policy based on approximating the inventory model with unreliable supplier by a model with a reliable supplier and suitably modified demand distribution. The performance of the order-up-to policy is verified by comparing it with both the optimal policy and a safety stock policy proposed in the literature. Further, we extend our approximation to a dual sourcing model with one slow, unreliable and one fast, fully reliable supplier. Compared to the dual-index order-up-to policy for the model with full information on the yield, the proposed approximation gives promising results.",
keywords = "METIS-300259, EWI-24193, IR-88495, Order-up-to policy, Yield uncertainty, Inventory management",
author = "Wanrong Ju and Gabor, {Adriana F.} and {van Ommeren}, {Jan C.W.}",
year = "2013",
month = dec,
language = "Undefined",
series = "Memorandum",
publisher = "University of Twente",
number = "2031",
address = "Netherlands",
}