Strategic Sourcing in the Presence of Uncertain Supply and Retail Competition

被引:99
作者
Chen, Jianqing [1 ]
Guo, Zhiling [2 ]
机构
[1] Univ Texas Dallas, Jindal Sch Management, Richardson, TX 75080 USA
[2] Singapore Management Univ, Sch Informat Syst, Singapore 178902, Singapore
关键词
dual sourcing; supply uncertainty; uniform allocation; price competition; supply chain; VERTICAL INTEGRATION; PERFORMANCE; SINGLE; ALLOCATION; PORTFOLIO; RISKS; YIELD;
D O I
10.1111/poms.12078
中图分类号
T [工业技术];
学科分类号
08 ;
摘要
This study develops an analytical model to evaluate competing retail firms' sourcing strategies in the presence of supply uncertainty. We consider a common supplier that sells its uncertain supply to two downstream retail firms engaging in price competition in a horizontally differentiated product market. The focal firm has a dual-sourcing option, while the rival firm can only source from the common supplier. We assess the system-wide effects of supply uncertainty on the focal firm's incentive to pursue the dual-sourcing strategy. We find that the focal firm's dual-sourcing strategy can create a win-win situation that leads to increased retail prices and expected profits for both firms. Furthermore, under certain conditions, we show that it is beneficial for the focal firm to strategically source from the common supplier, even if its alternative supplier offers a lower wholesale price. Overall, we identify two types of incentives for adopting the dual-sourcing strategy: the incentive of mitigating supply risk through supplier diversification and the incentive of strategic sourcing for more effective retail competition.
引用
收藏
页码:1748 / 1760
页数:13
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