A note on algorithms for dual sourcing inventory systems with Tailored Base-Surge policies

¹ School of Management, Zhejiang University of Technology, Hangzhou, Zhejiang 310023, P.R. China
² Economics and Business Administration, Chongqing University, Chongqing 400044, P.R. China
³ China Mobile Group Zhejiang Co., Ltd., TaiZhou, Zhejiang 318014, P.R. China
⁴ School of Economics, Zhejiang University of Technology, Hangzhou, Zhejiang 310023, P.R. China

^* Corresponding author: leilei312@cqu.edu.cn

Received: 7 March 2023
Accepted: 26 April 2024

Abstract

This paper proposes two algorithms for dual sourcing inventory systems with Tailored Base-Surge policies. The first algorithm solves a system of linear equations to calculate inventory positions, performance measures and their derivatives, and the second algorithm then uses them in the gradient-based type of method to find the optimal Tailored Base-Surge policy. Numerical experiments show that the two algorithms work well.