An efficient approach for dual sourcing inventory systems with Tailored Base-Surge policies

Nowadays most companies use dual sourcing strategies to manage supply chains. Recently, a practical policy called the Tailored Base-Surge (TBS) policy has been proposed to manage the system, and shown to perform well. We study a dual sourcing inventory system with i.i.d. demands and TBS policies. Using the techniques of MacLaurin series analysis, we develop an efficient method to calculate the moments of the inventory position, the bullwhip effect, and performance measures. Numerical experiments show that our method works well. (C) 2020 Elsevier B.V. All rights reserved.