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http://dx.doi.org/10.7232/JKIIE.2015.41.3.324

Optimality of the Sole Sourcing under Random Yield  

Park, Kyungchul (School of Business, Myongji University)
Lee, Kyungsik (Department of Industrial Engineering, Seoul National University)
Publication Information
Journal of Korean Institute of Industrial Engineers / v.41, no.3, 2015 , pp. 324-329 More about this Journal
Abstract
Though the supplier diversification is considered as a vital tool to mitigate the risk due to supply chain disruptions, there are results which show the optimality of the sole sourcing. This paper further generalizes the results to show that the sole sourcing is optimal under very mild conditions. Discussion on why the sole sourcing is optimal is given with the insight on the value of supplier diversification.
Keywords
Supplier diversification; Random yield; EOQ; Inventory control;
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