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

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 leadtimes and costs. We cover both discrete and continuous-time models. A distinguish feature of our review from others is that our review 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.