Determining the optimal size of supply base with the consideration of risks of supply disruptions

Ashutosh Sarkar and Pratap K.J. Mohapatra

International Journal of Production Economics, 2009, vol. 119, issue 1, 122-135

Abstract: Determining the optimal size of the supply base has haunted managers for years. A small supply base gives rise to the risk of supply disruption, whereas a large supply base increases the fixed cost. In this paper, we consider the risks of supply disruption due to occurrence of super, semi-super, and unique events in order to formulate a model to determine the optimal size of supply base. We depict the model in a decision tree-like structure and forward a tabular method of solution that obviates the need avoids evaluation of a majority of non-optimal solutions and thus overcomes the problem of dimensionality.

Keywords: Supply; base; Supply; risk; Supply; disruption (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:119:y:2009:i:1:p:122-135

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