The structure of periodic review policies in the presence of random yield
Operations Research
Diversification under supply uncertainty
Management Science
On the Value of Mix Flexibility and Dual Sourcing in Unreliable Newsvendor Networks
Manufacturing & Service Operations Management
A Newsvendor's Procurement Problem when Suppliers Are Unreliable
Manufacturing & Service Operations Management
Competition and Diversification Effects in Supply Chains with Supplier Default Risk
Manufacturing & Service Operations Management
Supplier diversification: effect of discrete demand
Operations Research Letters
Supply Disruptions, Asymmetric Information, and a Backup Production Option
Management Science
An inventory model with server interruptions
Proceedings of the 5th International Conference on Queueing Theory and Network Applications
Achieving a Long-Term Service Target with Periodic Demand Signals: A Newsvendor Framework
Manufacturing & Service Operations Management
Manufacturing & Service Operations Management
Manufacturing & Service Operations Management
Supply-Side Story: Risks, Guarantees, Competition, and Information Asymmetry
Management Science
Coordination Performance Evaluation of Supply Logistics in JIT Environment
International Journal of Advanced Pervasive and Ubiquitous Computing
Hi-index | 0.00 |
Dual sourcing and inventory are two prevalent and widely studied strategies firms use to manage yield risk. A pervasive but implicit assumption in the literature is that a firm knows its suppliers' yield distributions with certainty. This is a strong assumption in many circumstances. A firm is more likely to have a forecast of a supplier's yield distribution and to update that forecast based on its experiences with the supplier. We introduce and analyze a Bayesian model of “supply learning” (i.e., distribution updating) and investigate how supply learning influences both sourcing and inventory strategies in dual-sourcing and single-sourcing models, respectively. In the case of Bernoulli all-or-nothing yield distributions, we completely characterize the firm's optimal sourcing and inventory decisions for the supply-learning model. Among other results, we prove that for a given expected supplier reliability (i.e., the mean of the firm's forecast for the probability of successful delivery) an increase in the reliability forecast uncertainty increases the attractiveness of a supplier, but it reduces the firm's desire to invest in inventory to protect against future supply failures. We extend our analysis to allow for general yield distributions, multiple sourcing (i.e., more than two suppliers), and inventory carryover in the dual-sourcing model.