Robust supply base management: Determining the optimal number of suppliers utilized by contractors

Seong-Hyun Nam, John Vitton and Hisashi Kurata

International Journal of Production Economics, 2011, vol. 134, issue 2, 333-343

Abstract: The importance of robust supply base management under demand uncertainty requires an understanding of the benefits associated with a contractor having an optimal number of suppliers. The key benefit is a reduction in a contractor's total cost of supply base management. However, few supplier-optimizing models incorporate the perspectives of both demand uncertainty and supply base management costs. The objective of this paper is twofold: (1) to investigate the dynamics between demand uncertainty and coordination; and (2) to develop a model that determines the optimal number of suppliers that a contractor should maintain in its supply base to become more flexible and maximize its profits.

Keywords: Demand; uncertainty; Optimal; number; of; suppliers; Robustness; Optimal; control; Supply; chain; coordination (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:134:y:2011:i:2:p:333-343

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