Temporal distance in dual sourcing: A behavioural investigation

Abstract

AbstractWe explored the influence of temporal distances on order allocation between a low‐cost, less reliable supplier and a reliable, high‐cost supplier. We posited that a far temporal distance increases the preference for the unreliable, low‐cost supplier. We conducted a vignette‐based experiment where participants placed orders between the suppliers with different reliability and cost levels. Our experiment showed that a longer lead time led to larger orders for the low‐cost unreliable supplier. Our insights help explain how temporal distances inherent in supply chains can elicit differing evaluations of suppliers, altering ordering decisions.