HighlightsStudy the sourcing coordination between overseas components and local components in an assemble-to-order system.Derive optimal sourcing decisions for both overseas components and local components under supply and demand uncertainty.Explore the value of the flexible local sourcing policy.Propose a simple heuristic policy to approximate the optimal policy.
AbstractWe consider an assemble-to-order (ATO) system that purchases components from both overseas and local suppliers. The overseas suppliers may be disrupted, while the local suppliers are stable. The objective is to study how the ATO system should utilize a flexible local sourcing policy to mitigate overseas disruption risks. We derive optimal sourcing decisions which are determined by local suppliers’ cost ratios between pre-purchasing and replenishing and overseas suppliers’ disruption probabilities and total procurement cost. Furthermore, we discuss the balance between cost and responsiveness, explore the value of the flexible local sourcing policy and propose a simple and effective heuristic policy.
Managing global sourcing with disruption risks in an assemble-to-order system
2017-09-25
17 pages
Aufsatz (Zeitschrift)
Elektronische Ressource
Englisch
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|TIBKAT | Nachgewiesen 71.2006 - 78.2013