Value of Disruption Information in an EOQ Environment

Value of Disruption Information in an EOQ EnvironmentIsmail Serdar Bakal, Z. Pelin Bayindir, Deniz Esin EmerWe consider an infinite-horizon, continuous-review inventory modelwith deterministic, stationary demand where supply is subject to disruption.The supply process alternates randomly between ON and OFFstates. Backlogging is allowed only when the supplier is disrupted. Weseek the value of disruption information which enables the firm to placean extra order when supply is disrupted. We derive the long-run averagecost utilizing the renewal theory, and characterize the order-up-tolevels. We also compare the results to the setting with no disruption order opportunity.
Citation Formats
İ. S. Bakal, D. E. Emer, and Z. P. Bayındır, “Value of Disruption Information in an EOQ Environment,” 2014, Accessed: 00, 2021. [Online]. Available: