Analysis on supply emergency management based on dual-source

The problem about manufacturer's supply emergency management strategy under emergencies was studied. Based on single-source, the effects of two different strategies including risky dual-source and mixed dual-source on responding to supply disruption risk were analyzed. The optimal ordering decision and expected profit of the manufacturer in two different procurement strategies were compared, and the factors that have the impact on the manufacturer's choice of emergency strategy were analyzed. Finally, some numerical examples were used to demonstrate the impact of supply disruption probability on the procurement decision and expected profit of the manufacturer. It is shown that dual-source strategy is better than single-source in the prevention of the risk of supply disruptions. The total ordered quantity by the manufacturer in mixed dual-source is equal to that of single-source, but less than that of risky dual-source. In the case of mixed dual-source strategy, the manufacturer will increase the use of reliable supplier as the disruption probability increases, even though bear a higher purchase cost.