Dual Sourcing and Smoothing Under Non-stationary Demand Time Series: Re-shoring with Speed Factories


We investigate the emerging trend of near-shoring a small part of the global production back to local SpeedFactories. The short lead time of the responsive SpeedFactory reduces the risk of making large volumes in advance, yet it does not involve a complete re-shoring of demand. Using a breakeven analysis we investigate the lead time, demand, and cost characteristics that make dual sourcing with a SpeedFactory desirable compared to off-shoring to a single supplier. We extend the celebrated order-up-to replenishment policy to settings where capacity costs exist and demonstrate their excellent performance. We highlight the significant impact of autocorrelated and non-stationary demand series

Nov 6, 2018 12:05
INFORMS Annual Conference 2018, Phoenix, Arizona, United States
Session TC14, Room 126C, North Building
Stephen Disney
Stephen Disney

My research interests involve the application of control theory and statistical techniques to operations management and supply chain scenarios to investigate their dynamic, stochastic, and economic performance.