Diversification in economic order quantities (EOQ) model

In this paper an economic order quantities (EOQ) model is considered under the assumption that there exist two suppliers (sources) who ship amount-ord ered quantities. Since they may charge different prices, diversification ma y be advantageous rather than using a single supplier. We analyze this prob lem for EOQ models under two different situations: when orders are simultan eously placed from the two suppliers; and when orders are placed one after the other from the two suppliers. Analytic results for the optimal order qu antities and the minimum cost are obtained for the EOQ model. The paper con cludes with a numerical example.