Response to the supply chain disruptions with multiple sourcing

Abstract

The supply disruption has more influences on the enterprise performance than the demand disruption, while closer cooperation with suppliers is extremely important to mitigate supply disruption risk and improve performance. After the global supply chain emergencies arising frequently, all companies should ensure that supply disruption management becomes an intrinsic part of decision-making, to deal with the suppliers not fulfilling orders. Considered a two-echelon supply chain including one purchaser and two equal suppliers, in which the suppliers occurred common and unique supply disruption, this paper researched which measures the purchaser should take to maximize his expectation income. It concludes that the ordering quantity in multiple sourcing strategy is more than in single sourcing strategy, so multiple sourcing have function as safety storage; and for some special demand distribution function, such as uniformity distribution, multiple sourcing gains more expectation income than single sourcing.