Contingent Sourcing Ripples Considering Hoarding Behaviour Under Supply Disruptions in a Three-Tier Supply Chain

Shanshan Li and Yong He ()
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Shanshan Li: Nanjing Audit University
Yong He: Southeast University

A chapter in Handbook of Ripple Effects in the Supply Chain, 2025, pp 355-378 from Springer

Abstract: Abstract This chapter considers a make-to-order system where production gets disrupted due to a supply failure. To avoid a potential stockout risk and a responding price increase during disruption, customers might decide to stockpile extra units for future consumption, which may trigger procurement ripples. We investigate the optimal sourcing decisions for both the customers and the manufacturer to cope with random disruptions. To this end, both the once-off stockpiling and the continuous stockpiling (two-stage) are considered. The optimal stockpiling behaviour in these two modes is analytically provided. Next, a main model is formulated for the manufacturer to optimize the contingent sourcing quantities under different patterns of customer hoarding behaviour. Finally, by conducting numerical analysis, we generate further insights into the role of relative factors and provide specific managerial suggestions on how to adapt contingent sourcing to alleviate different random disruptions under different patterns of customers’ hoarding behaviours.

Keywords: Supply disruption management; Sourcing strategies; Stockpiling; Sourcing ripple (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-031-85508-5_14

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DOI: 10.1007/978-3-031-85508-5_14

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