Title: A queuing system with inventory and competing suppliers

Authors: Mohammad Saffari; Mohsen S. Sajadieh; Farhad Hassanzadeh

Addresses: Department of Industrial Engineering, Tafresh University, Tafresh, Iran ' Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, Tehran, Iran ' XPO Logistics, 4043 Piedmont Parkway, High Point, NC 27265, USA

Abstract: A single-server queuing system is considered where service consumes one unit of inventory which is maintained by two suppliers with different price and replenishment lead times. During inventory stockout, new customers refuse to enter the system (lost sales) but the existing ones remain in queue until inventory becomes available again (backlogged demand). We analytically derive the joint distribution of queue length and on-hand inventory in steady state and determine supplier-specific ordering policies that maximise the average system profit. A special case of the system with multiple servers is addressed. A numerical study reveals dynamics of the optimal ordering policy with respect to price and replenishment lead-times. [Received: 15 April 2018; Revised: 21 November 2018; Accepted: 18 December 2018]

Keywords: inventory; competing suppliers; queuing; stationary distribution.

DOI: 10.1504/EJIE.2019.100006

European Journal of Industrial Engineering, 2019 Vol.13 No.3, pp.420 - 433

Available online: 28 May 2019 *

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