Impact of supply risk on cost pass-through

Junhyun Bae and Ji-Hung (Ryan) Choi

Applied Economics Letters, 2025, vol. 32, issue 16, 2349-2353

Abstract: We study the cost pass-through rate in a supply chain setting where a buying firm sources from either a single unreliable supplier or dual unreliable suppliers. Numerous papers studying cost pass-through rates have assumed that supply is always certain and ample, which is not usually the case in practice. We find that the cost pass-through rate should depend on the supply uncertainty, its risk-sharing levels with upstream suppliers, and different sourcing strategies. In particular, the cost pass-through rate increases in supply risk-sharing levels, but decreases under single sourcing, compared to dual sourcing.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2024.2332585 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:32:y:2025:i:16:p:2349-2353

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2024.2332585

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().