Retailers’ Order Strategies in Transshipments in Disruption Risks of Supply Chains
- 12 Downloads
This article investigates the order problem in a two-stage supply chain consisting of retailers, primary suppliers and backup suppliers. From retailers’ perspectives, the optimal offering strategies in unidirectional transshipments are analyzed on the basis of disruption risks in supply chains. With a focus on retailers’ profits, it develops the decision model of retailers’ orders in the dual sourcing mode and in the mode of capacity options, to maximize the retailers’ expected profits. The simulation shows that retailers’ optimal order decisions are not correlated with the joint disruption probability in the two order modes without service constraints; retailers’ optimal decisions are influenced by the joint disruption probability in the two order modes with service constraints, and the impact of the joint disruption probability of the primary suppliers’ optimal order from retailers differs in the two modes. Retailers’ order decisions in respect of backup suppliers are more sensitive to the changing volumes of transshipments. The contribution of this article is the impact of main parameters on retailers’ decisions, providing some guidance for enterprises to make order decisions.
KeywordsCapacity options disruption risks in supply chains dual sourcing purchase order strategies
Unable to display preview. Download preview PDF.
- Giri B C, Managementinventory with two suppliers under yield uncertainty and risk aversion, International Journal of Production Economics, 2010, 15(9): 214–219.Google Scholar
- Li S S, He Y, and Chen L J, Dynamic strategies for supply disruptions in production-inventory systems, International Journal of Production Economics, https://doi.org/10.1016/j.ijpe.2017.04.003.
- Sophie P, Managing risks of supply-chain disruptions: Dual sourcing as a real option, Master’s degree thesis, Massachusetts Institute of Technology,Massachusetts, 2003.Google Scholar
- Evers P, Hidden benefits of emergency transshipments, Journal of Business Logistics, 1997, 18(2): 55–76.Google Scholar