Work

Simplicity or flexibility? Dual sourcing in multi-echelon systems under disruption

Year: 2025

Type: article

Abstract: Disruptive events like the COVID-19 pandemic have exposed supply chain vulnerabilities. This study focuses on dual sourcing as a resilient strategy and examines a stochastic, single-item, multi-echelon, multi-period, dual sourcing inventory system under backorders. In each echelon, the decision-maker faces a dual-sourcing situation wherein the item can be replenished from a slow regular supplier or a more expensive and faster emergency supplier. We compare two inventory management policies: the Dual-Index Policy (DIP) and the Tailored Base-Surge (TBS) Policy, while also investigating how various factors influence policy effectiveness and the role of demand disruptions. Our findings indicate that the TBS policy generally relies more on upstream suppliers than the DIP. However, in scenarios of high demand uncertainty, upstream suppliers are seldom used. DIP is more effective for short networks facing sudden demand drops, whereas TBS excels when experiencing demand spikes. • We study a single-product multi-echelon inventory management system. • We compare dual-index and tailored-base surge policies. • We consider both stationary and non-stationary demand cases. • We consider demand disruptions in the supply chain. • We provide extensive numerical experiments.

Source: Operations Research Perspectives

DOI: 10.1016/j.orp.2025.100333

Authors: Sadeque Hamdan, Youssef Boulaksil, Kilani Ghoudi, Younes Hamdouch

Institutions: Bangor University, United Arab Emirates University, Alfaisal University

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,790