Disruption Risk and Optimal Sourcing in Multitier Supply Networks
| Autor: | Robert Swinney, Erjie Ang, Dan A. Iancu |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
021103 operations research
Strategy and Management Supply chain 05 social sciences 0211 other engineering and technologies ComputerApplications_COMPUTERSINOTHERSYSTEMS 02 engineering and technology Management Science and Operations Research Tier 1 network Tier 2 network 0502 economics and business Profit margin Operations management Business Disruption risk 050203 business & management Industrial organization |
| Zdroj: | Management Science. 63:2397-2419 |
| ISSN: | 1526-5501 0025-1909 |
| Popis: | We study sourcing in a supply chain with three levels: a manufacturer, tier 1 suppliers, and tier 2 suppliers prone to disruption from, e.g., natural disasters such as earthquakes or floods. The manufacturer may not directly dictate which tier 2 suppliers are used but may influence the sourcing decisions of tier 1 suppliers via contract parameters. The manufacturer’s optimal strategy depends critically on the degree of overlap in the supply chain: if tier 1 suppliers share tier 2 suppliers, resulting in a “diamond-shaped” supply chain, the manufacturer relies less on direct mitigation (procuring excess inventory and multisourcing in tier 1) and more on indirect mitigation (inducing tier 1 suppliers to mitigate disruption risk). We also show that while the manufacturer always prefers less overlap, tier 1 suppliers may prefer a more overlapped supply chain and hence may strategically choose to form a diamond-shaped supply chain. This preference conflict worsens as the manufacturer’s profit margin increases, as disruptions become more severe, and as unreliable tier 2 suppliers become more heterogeneous in their probability of disruption; however, penalty contracts—in which the manufacturer penalizes tier 1 suppliers for a failure to deliver ordered units—alleviate this coordination problem. This paper was accepted by Yossi Aviv, operations management. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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