On a Dual Sourcing Policy in Two-sided Disruptive Supply Chain

摘要

In this study, we consider a single echelon supply chain in which a retailer replenishes inventory from two vulnerable suppliers whose supply could be affected by in/out-bound disruptions sporadically. Under a stochastic demand setting, a dual-sourcing policy with a supplementary supplier is introduced to mitigate the profit losses for the retailer. We built mathematical models to evaluate the performances of the retailer under single and dual sourcing policies respectively. The study shows that a risk-neutral retailer will prefer a dual sourcing policy that makes him carry more inventory from a more robust supplier when facing two-sided disruption risks. Furthermore, the retailer performances in terms of total profit are overwhelming under scenarios where the supplementary supplier is less, median and more robust to risks. Our mathematical models is examined through numerical examples and the results provide important guidelines for implementing sourcing policies when two-sided disruption risks is considered.