Competitive relocation of shortage supply in a distribution network

The paper aims to deal with the reallocating supply problem that result from the order promising process under shortage. To this end, we develop a competitive distribution model to facilitate decision-making for order managers and provide an intelligent support tool. The basis of the distribution model structure is a non-linear constrained optimization program that intends to minimize the costs of competing customers by considering the possibility of making partial and delayed deliveries. We obtain explicit conditions for orders relocation under linear storage costs. An explicit form of conditions on the current delivery pattern allows one to support decision-making in the field of order management. In particular, we design decision-making strategies, exploiting obtained conditions, that mitigate consumers’ risks concerning partial and delayed deliveries under a shortage.