A comparative study on allocation/rationing mechanisms operational with/without backorder clearing in divergent supply chains
- 11 Downloads
The management of inventory in a divergent supply chain involves inventory allocation/rationing in addition to the determination of order policy parameters. In the case of a stock point feeding product(s) to several downstream members, rationing mechanism can be viewed as a special case of the allocation mechanism. In a supply chain with multi-period ordering cycles, a rationing decision ensures that the entire inventory available with the feeder stock point is rationed to downstream members, whereas an allocation decision need not allocate the entire inventory available, and it is at the discretion of the decision maker at the feeder stock point to retain inventory for possible high priority demands in future periods. In any supply chain permitting backordering of demands from downstream members, the clearing of backorders is a matter of concern. This study addresses the said issue by ensuring that the feeder stock point considers the current period demand for fulfilment only after clearing the backorders with respect to the downstream members. Through this study, an attempt is made to develop mathematical models for supply chains operating with installation-specific costs (holding and shortage) and ordering policy (base stock) over a finite time horizon with and without clearing backorders in the case of rationing as well as allocating inventory to downstream members. Specifically, this work appears to be the first comparative study on allocation and rationing mechanisms in association with/without backorder clearing mechanisms in divergent supply chains, and their impact on the total supply chain cost.
KeywordsAllocation mechanism rationing mechanism backorder clearing mechanism divergent supply chain base stock total supply chain cost mathematical models
This research work has been carried out with the financial support from IIT Madras, University of Passau and DAAD as a part of the joint PhD degree programme. The authors are thankful to reviewers and the Editor for their suggestions and comments to improve the earlier version of the paper.
- 6.Jackson P L and Muckstadt J A 2015 Multi-period stock allocation via robust optimization. ORIE Technical Reports-Cornell University http://hdl.handle.net/1813/39275
- 17.Rajeswari S 2009 Rationing approaches and order-up-to level policy in a two-stage divergent supply chains Unpublished M.S. Thesis, Department of Management Studies, Indian Institute of Technology Madras, Chennai, IndiaGoogle Scholar
- 22.John K, Rajendran C and Ziegler H 2016 Investigation of order-up-to policy and allocation-rationing mechanism for divergent supply chains with multiple objectives In: Ravindran A R (Ed.) Multiple Criteria Decision Making in Supply Chain Management U.S.A. CRC Press Google Scholar
- 23.John K, Rajendran C and Ziegler H 2017 Investigations on divergent supply chains operating with backorder clearing mechanisms, multiple objectives and order policies Unpublished Ph.D. Thesis, Department of Management Studies, Indian Institute of Technology Madras Chennai, India and University of Passau GermanyGoogle Scholar