Strategic Sourcing in the Presence of Uncertain Supply and Retail Competition

• 成果类型: Article
• 署名作者: Chen, Jianqing; Guo, Zhiling
• 署名单位: University of Texas System; University of Texas Dallas; Singapore Management University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12078
• 发表日期: 2014
• 页码: 1748-1760
• 关键词: Dual sourcing; supply uncertainty; uniform allocation; Price competition; supply chain

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.