Single versus multiple sourcing in the presence of risks

Paul D. Berger · Amy Zhaohui Zeng

110 citations0/0 files storedJournal of the Operational Research Society

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Supply Chain and Inventory Management Sustainable Supply Chain Management Supply Chain Resilience and Risk Management

Abstract

This paper relies on a decision-tree approach to aid a buying firm in determining the optimal size of its supply base in the presence of risks. The risk under consideration refers to any unpredictable operations interruptions caused by all suppliers being unavailable to satisfy the buying firm's demand. The relationship between the levels of risk and associated trade-offs is captured by a decision-tree model, from which the expected cost function is formulated. The exact or approximate optimal solutions for various scenarios, as well as their sensitivity, are obtained and examined.

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1999Inventory management and production planning and scheduling 1992Production and Operations Analysis 2012Purchasing and supply chain management 2019Production and Operations Analysis 2000Purchasing organization involvement in risk assessments, contingency plans, and risk management: an exploratory study 1995Preferences for single sourcing and supplier selection criteria 2003The Shape of Utility Functions and Organizational Behavior 1998Proactive Supply Management: The Management of Risk

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2015Developing a resilient supply chain through supplier flexibility and reliability assessment 2016An assessment of supply chain disruption mitigation strategies 2013Joint supplier selection and scheduling of customer orders under disruption risks: Single vs. dual sourcing 2012Developing a grey-based decision-making model for supplier selection 2008Supplier default dependencies: Empirical evidence from the automotive industry 2023

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