Method for determining optimal number of suppliers under risk control

摘要

The purpose of the paper is to present an effective method to determine the optimal number of suppliers considering the risk control and cost control.Two risk events are considered: "common risk event" and "individual risk event".The probabilities of these events,the financial loss caused by disasters,and the operating cost of working with multiple suppliers are considered in the analysis.An expression which could calculate the optimal number of suppliers is obtained.The numerical examples prove the rationality of the method and analysis the sensitivity of the optimal number to the factors.