Production and Operations Management Vol. 6 No. 3 1997
RATIONALIZATION OF THE SUPPLIER BASE IN THE PRESENCE OF YIELD UNCERTAINTY
Abstract
An important aspect of supply chain management is the optimal configuration of the supplier base. We develop a model to determine optimal lot sizes and the optimal number of suppliers when the yield of the product delivered from each supplier is random. While small orders from a large number of suppliers can reduce yield uncertainty, fixed costs associated with each supplier provide a penalty for having too many suppliers. This is the key tradeoff addressed by our model. We look at the cases when the suppliers are identical as well as nonidentical.
- DOI
- 10.1111/j.1937-5956.1997.tb00432.x
- Volume
- 6
- Issue
- 3
- Pages
- 291-308
- Language
- en
- Sources
- crossref openalex