, 44:231 | Cite as

A comparative study on allocation/rationing mechanisms operational with/without backorder clearing in divergent supply chains

  • Kurian JohnEmail author
  • Chandrasekharan Rajendran
  • Hans Ziegler


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.


Allocation 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.


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Copyright information

© Indian Academy of Sciences 2019

Authors and Affiliations

  • Kurian John
    • 1
    Email author
  • Chandrasekharan Rajendran
    • 2
  • Hans Ziegler
    • 3
  1. 1.Department of Mechanical EngineeringMar Athanasius College of EngineeringKothamangalam, ErnakulamIndia
  2. 2.Department of Management StudiesIndian Institute of Technology MadrasChennaiIndia
  3. 3.Department of Production, Operations and Logistics Management, Faculty of Business Administration and EconomicsUniversity of PassauPassauGermany

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