Dual-Sourcing, Dual-Mode Dynamic Stochastic Inventory Models: A Review

31 Pages Posted: 14 Jul 2021 Last revised: 30 Sep 2021

Date Written: September 29, 2021


We review academic research on dual-sourcing (or dual-mode) dynamic stochastic inventory models, which study the replenishment of inventory from two sources (or two transportation modes) in the presence of demand uncertainty. The classic assumption, also adopted here, is that the two sources (modes) differ by replenishment lead times and costs. We cover both discrete- and continuous-time models. A feature distinguishing our review from others is that ours is more technically detailed and provides self-contained proofs of several fundamental results in the dual-sourcing literature. We also highlight theory advanced recently by using asymptotic analysis.

Suggested Citation

Xin, Linwei and Van Mieghem, Jan Albert, Dual-Sourcing, Dual-Mode Dynamic Stochastic Inventory Models: A Review (September 29, 2021). Available at SSRN: https://ssrn.com/abstract=3885147 or http://dx.doi.org/10.2139/ssrn.3885147

Linwei Xin (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Jan Albert Van Mieghem

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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