Single or dual sourcing: decision-making in the presence of supply chain disruption risks

The focus of this paper is placed on evaluating the impacts of supply disruption risks oil the choice between the famous single and dual sourcing methods in a two-stage supply chain with a non-stationary and price-sensitive demand. The expected profit functions of the two sourcing modes in the presence of supply chain disruption risks are first obtained, and then compared so that the critical values of the key factors affecting the final choice are identified. Finally, the sensitivity of the buyer's expected profit to various input factor, is examined through numerical examples, which provide guidelines for how to use each sourcing method. (C) 2008 Elsevier Ltd. All rights, reserved.