Competition and diversification effects in supply chains with supplier default risk

• 成果类型: Article
• 署名作者: Babich, Volodymyr; Burnetas, Apostolos N.; Ritchken, Peter H.
• 署名单位: University of Michigan System; University of Michigan; National & Kapodistrian University of Athens; University System of Ohio; Case Western Reserve University
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.1060.0122
• 发表日期: 2007
• 页码: 123-146
• 关键词: resilient supply chains; supply risk; Supply disruptions; COMPETITION; procurement; Default correlation; equilibrium pricing

摘要

We study the effects of disruption risk in a supply chain where one retailer deals with competing risky suppliers who may default during their production lead times. The suppliers, who compete for business with the retailer by setting wholesale prices, are leaders in a Stackelberg game with the retailer. The retailer, facing uncertain future demand, chooses order quantities while weighing the benefits of procuring from the cheapest supplier against the advantages of order diversification. For the model with two suppliers, we show that low supplier default correlations dampen competition among the suppliers, increasing the equilibrium wholesale prices. Therefore the retailer prefers suppliers with highly correlated default events, despite the loss of diversification benefits. In contrast, the suppliers and the channel prefer defaults that are negatively correlated. However, as the number of suppliers increases, our model predicts that the retailer may be able to take advantage of both competition and diversification.