OPTIMAL SOURCING UNDER PRICE UNCERTAINTY USING PORTFOLIOOPTIMIZATION APPROACH

摘要

Optimal sourcing under price uncertainty is a relatively less researched area in analyticalsupply chain literature. One of the key decisions in optimal sourcing is deciding the shareof alternative suppliers or sourcing arrangements in order to maximize the overall value.We propose a model for deciding optimal patterns of sourcing across "deterministiccontractual"and "stochastic-open market" arrangements while accounting for buyer'svaried cost disutility pattern over the PLC. We demonstrate the application of the modeland discuss the normative insights and strategic implications of the results.