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    • Keywords


      Allocation mechanism; rationing mechanism; backorder clearing mechanism; divergent supply chain; base stock; total supply chain cost; mathematical models.

    • Abstract


      The management of inventory in a divergent supply chain involves inventory allocation/rationing in addition to the determination of order policy parameters. In the case of a stock point feeding product(s) to several downstream members, rationing mechanism can be viewed as a special case of the allocation mechanism. In a supply chain with multi-period ordering cycles, a rationing decision ensures that the entire inventory available with the feeder stock point is rationed to downstream members, whereas an allocation decision neednot allocate the entire inventory available, and it is at the discretion of the decision maker at the feeder stock point to retain inventory for possible high priority demands in future periods. In any supply chain permitting backordering of demands from downstream members, the clearing of backorders is a matter of concern. This study addresses the said issue by ensuring that the feeder stock point considers the current period demand for fulfilment only after clearing the backorders with respect to the downstream members. Through this study, anattempt is made to develop mathematical models for supply chains operating with installation-specific costs (holding and shortage) and ordering policy (base stock) over a finite time horizon with and without clearing backorders in the case of rationing as well as allocating inventory to downstream members. Specifically, thiswork appears to be the first comparative study on allocation and rationing mechanisms in association with/ without backorder clearing mechanisms in divergent supply chains, and their impact on the total supply chaincost.

    • Author Affiliations



      1. Department of Mechanical Engineering, Mar Athanasius College of Engineering, Kothamangalam, Ernakulam 686666, Indi
      2. Department of Management Studies, Indian Institute of Technology Madras, Chennai 600036, India
      3. Department of Production, Operations and Logistics Management, Faculty of Business Administration and Economics, University of Passau, 94032 Passau, Germany
    • Dates

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