EURO 2025 Leeds
Abstract Submission

2853. Joint Ordering-Delivery Policies for Dual-Channel Distribution Network under Supply Disruption

Invited abstract in session MB-30: Joint lot-sizing, stream Advanced Lot Sizing and Inventory Strategies .

Monday, 10:30-12:00
Room: Maurice Keyworth 1.05

Authors (first author is the speaker)

1. Nishika Bhatia
Jindal School of Banking & Finance, OP Jindal Global University
2. Nalan Gulpinar
Durham University Business School

Abstract

In a dual-channel network, a firm distributes its products through different channels mainly comprising of its own stores as well as third-party retailers. A disruption at any point of the dual-channel network impacts the overall operations of the firm. Thus, it is essential to consider disruption at both demand and supply of the network. To mitigate the disruption from supply side, the firm diversifies its sourcing strategy by ordering from a set of emergency suppliers along with their regular ones. In this research, we investigate the joint ordering and delivery policies of the dual-channel firm under disruption. At each decision-making stage, the firm decides how much to order from regular and emergency suppliers and how much to allocate inventories among its own stores and third party retailers. The joint decision-making problem of the firm is modelled as a stochastic dynamic program. The consideration of dual-retail channels and multiple decisions massively expands state and action spaces. Thus, the underlying dynamic programming model is computationally difficult to solve by the standard solution methodology. We propose two decomposition methods where one of the methods utilises the structural properties of the dual-retail channel network while the other one considers its practical applications like the technological advances in inventory-tracking. An extensive numerical study is conducted to highlight different features of the models and to derive managerial insights.

Keywords

Status: accepted

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