Dual Sourcing

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Dual Sourcing

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Author : Ulrich Schimpel
language : en
Publisher: KIT Scientific Publishing
Release Date : 2014-08-14

Dual Sourcing written by Ulrich Schimpel and has been published by KIT Scientific Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-08-14 with Business & Economics categories.

Companies with high-performing supply chains enjoy essential competitive ad- vantages. However, supply chain management faces an environment of rising risk that endangers these competitive advantages. One of the reasons is to outsource parts of their business. This bears the risk of significantly increased lead times and lead time variability. It is the impact of lead time variability on inventory management that is the central aspect of this book. It describes a mathematical model for dual sourcing with two reorder points, shows the deviation between stochastic and deterministic calculations in a sensitivity analysis, and investigates different relaxations of a traditional dual-sourcing policy.

The Economic And Environmental Sustainability Of Dual Sourcing

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Author : Heidrun Rosič
language : en
Publisher: Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften
Release Date : 2012

The Economic And Environmental Sustainability Of Dual Sourcing written by Heidrun Rosič and has been published by Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Business categories.

Supply chains consist of all processes which are needed in order to supply customers with the required products. This book shows how the performance of supply chains can be evaluated considering both economic and environmental criteria. It deals with dual sourcing in the context of the newsvendor model.

Managing Risks Of Supply Chain Disruptions

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Author : Sophie Pochard
language : en
Publisher:
Release Date : 2003

Managing Risks Of Supply Chain Disruptions written by Sophie Pochard and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with categories.

Strategic Analysis Of Dual Sourcing And Dual Channel With An Unreliable Alternative Supplier

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Author : Niu Baozhuang
language : en
Publisher:
Release Date : 2020

Strategic Analysis Of Dual Sourcing And Dual Channel With An Unreliable Alternative Supplier written by Niu Baozhuang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.

In today's increasingly interconnected world, co-opetition has emerged as a new business practice among the technology firms. The boundaries between cooperation and competition have been becoming vague, where rivals engage in collaborative activities. One of the most critical challenges facing the co-opetitive supply chain concerns with the sourcing strategy. This study develops an analytical model to investigate the strategic decision of the original equipment manufacturer (OEM) in the presence of a competitive supplier (i.e. frenemy) as well as a non-competitive supplier who nevertheless suffers from unreliable production technology. We find that the OEM always prefers the supplier diversification by engaging the additional non-competitive supplier although the non-competitive supplier experiences the yield uncertainty problem. Further, we show that the non-competitive supplier's expected profit is unimodal in its technology level in the dual sourcing scenario. This result suggests that the non-competitive supplier may not have incentives to further improve its production technology once it reaches a threshold. Finally, we investigate the credibility of competitive supplier's threat to stop supplying the components to OEM as a response of OEM's engagement of a new supplier. We show that the termination of component-selling business by competitive supplier is a non-credible threat to prevent OEM seeking the alternative supplier.

Using A Dual Sourcing Option In The Presence Of Asymmetric Information About Supplier Reliability

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Author : Zhibin (Ben) Yang
language : en
Publisher:
Release Date : 2012

Using A Dual Sourcing Option In The Presence Of Asymmetric Information About Supplier Reliability written by Zhibin (Ben) Yang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.

We study a buyer's strategic use of a dual-sourcing option when facing suppliers possessing private information about their disruption likelihood. We solve for the buyer's optimal procurement contract. We show that the optimal contract can be interpreted as the buyer choosing between diversification and competition benefits. Better information increases diversification benefits and decreases competition benefits. Therefore, with better information the buyer is more inclined to diversify. Moreover, better information may increase or decrease the value of the dual-sourcing option, depending on the buyer's unit revenue: for large revenue, the buyer uses the dual sourcing option for diversification, the benefits of which increase with information; for small revenue, the buyer uses the dual sourcing option for competition, the benefits of which decrease with information. Surprisingly, as the reliability of the entire supply base decreases, the buyer may stop diversifying under asymmetric information (to leverage competition), while it would never do so under symmetric information. Finally, we analyze the effect of codependence between supply disruptions. We find that lower codependence leads the buyer to rely less on competition. Because competition keeps the information costs in check, a reduction in supplier codependence increases the buyer's value of information. Therefore, strategic actions to reduce codependence between supplier disruptions should not be seen as a substitute for learning about suppliers' reliabilities.

Dual Sourcing Under Random Supply Capacities

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Author : Burcu Tan
language : en
Publisher:
Release Date : 2015

Dual Sourcing Under Random Supply Capacities written by Burcu Tan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

Sourcing from multiple suppliers with different characteristics is common in practice for various reasons. This paper studies a dynamic procurement planning problem in which the firm can replenish inventory from a fast and a slow supplier, both with uncertain capacities. The optimal policy is characterized by two reorder points, one for each supplier. Whenever the pre-order inventory level is below the reorder point, a replenishment order is issued to the corresponding supplier. Interestingly, the reorder point for the slow supplier can be higher than that of the fast even if the former has a higher cost, lower reliability, and smaller capacity than the latter, suggesting the possibility of ordering exclusively from an inferior slow supplier in the short term. Moreover, the firm may allocate a larger portion of the long-term total order quantity to the slow supplier than to the fast, even if the former does not possess any cost or reliability advantage over the latter. Such phenomena, different from the observations made in previous studies, happen when the demand is uncertain and the supply is limited or unreliable. Our observations highlight the importance of incorporating both demand uncertainty and supplier characteristics (i.e., cost, lead time, capacity and uncertainty) in a unified framework when formulating supplier selection and order allocation strategies.

Cost Effectiveness Of Dual Sourcing For Production Price Competition Is Uncertain

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Author : United States General Accounting of Gao
language : en
Publisher: Independently Published
Release Date : 2019-03-22

Cost Effectiveness Of Dual Sourcing For Production Price Competition Is Uncertain written by United States General Accounting of Gao and has been published by Independently Published this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-03-22 with Political Science categories.

Cost Effectiveness of Dual Sourcing for Production Price Competition Is Uncertain

Robust Dual Sourcing Inventory Management

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Author : Jiankun Sun
language : en
Publisher:
Release Date : 2019

Robust Dual Sourcing Inventory Management written by Jiankun Sun and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.

(1) Problem Definition: How to dynamically replenish inventory from two supply sources or shipping modes with general lead times. The fast source is more expensive than the slow source.(2) Academic/Practical Relevance: Dual sourcing provides supply chain flexibility to mitigate demand and supply risk. Despite its relevance in practice, characterizing the optimal dual sourcing policy is extremely challenging, and the optimal stochastic policy for non-consecutive lead times has been unknown for over 50 years.(3) Methodology: We present and solve a robust rolling horizon model for periodically reviewed dual sourcing inventory systems that minimizes the total cost of purchasing, inventory holding and backlogging.(4) Results: We prove that the optimal robust policy is a dual index, dual base-stock policy that constrains or “caps” the slow order and provide closed-form expressions for the three control parameters. The optimality result is established for general lead times and can accommodate non-stationary demand. Our numerical study shows that as the lead time difference grows, the capped dual index policy increasingly smooths slow orders and, for stationary demand, converges to the tailored base surge policy, which places a constant slow order and has been shown to be asymptotically optimal.(5) Managerial Implications: Our capped dual index policy is easy to understand, explain and implement in practice. In an extensive simulation study, the capped dual index policy performs as well as, and can even outperform, the best heuristics presented in the stochastic inventory literature.

Global Dual Sourcing

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Author : Gad Allon
language : en
Publisher:
Release Date : 2013

Global Dual Sourcing written by Gad Allon and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.

When designing a sourcing strategy in practice, a key task is to determine the average order rates placed to each source because that affects costs and supplier management. We consider a firm that has access to a responsive near-shore source (e.g., Mexico) and a low-cost offshore source (e.g., China). The firm must determine an inventory sourcing policy to satisfy random demand over time. Unfortunately, the optimal policy is too complex to allow a direct answer to our key question. Therefore, we analyze a tailored base-surge (TBS) sourcing policy that is simple, used in practice, and captures the classic trade-off between cost and responsiveness. The TBS policy combines push and pull controls by replenishing at a constant rate from the offshore source and producing at the nearshore plant only when inventory is below a target. The constant base allocation allows the offshore facility to focus on cost efficiency, whereas the nearshore facility's quick response capability is utilized only dynamically to guarantee high service. The research goals are to (i) determine the allocation of random demand into base and surge capacity, (ii) estimate the corresponding working capital requirements, and (iii) identify and value the key drivers of dual sourcing. We present performance bounds on the optimal cost and prove that economic optimization brings the system into heavy traffic. We analyze the sourcing policy that is asymptotically optimal for high-volume systems and present a simple "square-root" formula that is insightful to answer our questions and sufficiently accurate for practice, as is demonstrated with a validation study.

Dual Sourcing

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Author : Ulrich Schimpel
language : en
Publisher:
Release Date : 2010

Dual Sourcing written by Ulrich Schimpel and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.

Companies with high-performing supply chains enjoy essential competitive ad- vantages. However, supply chain management faces an environment of rising risk that endangers these competitive advantages. One of the reasons is to outsource parts of their business. This bears the risk of significantly increased lead times and lead time variability. It is the impact of lead time variability on inventory management that is the central aspect of this book. It describes a mathematical model for dual sourcing with two reorder points, shows the deviation between stochastic and deterministic calculations in a sensitivity analysis, and investigates different relaxations of a traditional dual-sourcing policy.