Research Of Ordering Decision In Dual-sourcing Supply Chain With Substitute Product

With the process of globalised supply chain, there are more and more suppliers can provide substituted products to meet consumers` demand. And different suppliers have different supply capacity, supply price, lead time. In this case, the retailers need to make a reasonable order decision considering the market demand and its own cost structure, so as to minimize the total cost.This thesis establishes an alternative supply chain which has two suppliers and one retailer. In this supply chain, one of the two suppliers is a reliable supplier, and the other one is not reliable. First, this thesis researches the retailer`s order decision when supply and demand is uncertain in the same time and the influence of parameters. Then this thesis researches the Stackelberg game between the retailer and suppliers and the Cournot competition between two suppliers, then gets the equilibrium. Finally, this thesis researches the retailer`s order decision when the lead time is uncertain.The results show that when the supply is uncertain, with the increase of inventory costs and demand uncertainty, retailers will increase the amount of orders from unreliable suppliers; and with the increase of the shortage penalty cost, retailers will increases the amount of orders from reliable suppliers. And the Stackelberg game equilibrium shows that with the increase of inventory costs and the uncertainty of the demand, the suppliers will reduce the price; with the increase of the shortage penalty cost and the expectation of demand; the suppliers will increase the price. And when the lead time is uncertain, with the increase of the shortage penalty, the retailer will delay the ordering time; and with the increase of the inventory costs, the price and the uncertainty of the demand, the retailer will aadvance the ordering time. Finally, the retailers ordering decisions model has been validated by a numerical example.