Avoiding Disruption

Abstract

During the COVID-19 pandemic, supply chain managers were faced with unprecedented challenges, risks, and disruptions of supplies. Firms were redesigning their strategies to ensure the continuity, sustainability and resilience of their operations. This necessitated the development of new approaches to supply chain management by considering factors that may hinder or disrupt their operations. The purpose of this thesis is to consider a two-tier supply chain with a retailer that acquires a certain product from two available suppliers, a primary unreliable one and a secondary reliable but more expensive supplier. Three mathematical models are formulated. The first model extends the Economic Order Quantity (EOQ) model to the case of dual suppliers. The second model allows for shortages while taking into account the unreliable nature of the primary supplier. The last model is an EOQ model with dual suppliers and price discount. In each case, the optimal solution is derived and numerical examples are presented to illustrate the calculations. Sensitivity analyses are provided to assess the robustness of the models.