AN INVESTIGATION OF ORDER SPLITTING IN AN (S, Q) INVENTORY SYSTEM WHERE UNIT DEMAND IS CONSTANT AND LEAD TIME VARIABLE

This study addresses the problem of two-vendor, order splitting in (s, Q) inventory systems, where s in the reorder point and Q the order quantity. It is intended to expand inventory theory into the topic of splitting orders among vendors. In this study, models are developed for the two-vendor deterministic (s, Q/2) and the two-vendor stochastic (s, Q/2:L) inventory systems. In the latter, lead time, L, is stochastic. This study also provides a comprehensive review of the determination of lead times in the two-vendor, order-splitting inventory system.; In this study, four models are developed: the two-vendor deterministic (s, Q/2) model where shortages are not allowed, the two-vendor deterministic (s, Q/2:LS) model where shortage is allowed, the one-vendor stochastic (s, Q:L) model where lead time is stochastic, and the two-vendor stochastic (s, Q/2:L) model where lead time is stochastic. Total cost functions are developed and total costs calculated. The results indicate that under the assumption that the ordering cost does not increase over that for one vendor, when we place two equal split orders simultaneously with two vendors, the total cost, inventory on hand, and average number of units short are indeed lower.; The dissertation is divided into seven chapters. Chapter 1 includes an introduction to the multiple-sourcing problem, a review of EOQ and (s, Q) models, and has described the objectives of this dissertation. Chapter 2 consists of a survey of the (s, Q) inventory literature and the determination of lead times via available results from order statistics. Chapter 3 formulates two-vendor deterministic (s, Q/2) models. Chapters 4 and 5 comprise detailed studies of the two-vendor stochastic (s, Q/2:L) inventory model where demand is deterministic and lead time is variable. Chapter 6 involves a simulation study of the two-vendor stochastic (s, Q/2:L,D) inventory system with both demand and lead time variable. Chapter 7 gives the summary, conclusions, and suggestions for future research.