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Determining the optimal size of supply base with the consideration of risks of supply disruptions

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  • Sarkar, Ashutosh
  • Mohapatra, Pratap K.J.

Abstract

Determining the optimal size of the supply base has haunted managers for years. A small supply base gives rise to the risk of supply disruption, whereas a large supply base increases the fixed cost. In this paper, we consider the risks of supply disruption due to occurrence of super, semi-super, and unique events in order to formulate a model to determine the optimal size of supply base. We depict the model in a decision tree-like structure and forward a tabular method of solution that obviates the need avoids evaluation of a majority of non-optimal solutions and thus overcomes the problem of dimensionality.

Suggested Citation

  • Sarkar, Ashutosh & Mohapatra, Pratap K.J., 2009. "Determining the optimal size of supply base with the consideration of risks of supply disruptions," International Journal of Production Economics, Elsevier, vol. 119(1), pages 122-135, May.
  • Handle: RePEc:eee:proeco:v:119:y:2009:i:1:p:122-135
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    References listed on IDEAS

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    10. Ruiz-Torres, Alex J. & Mahmoodi, Farzad, 2007. "The optimal number of suppliers considering the costs of individual supplier failures," Omega, Elsevier, vol. 35(1), pages 104-115, February.
    11. Tang, Christopher & Tomlin, Brian, 2008. "The power of flexibility for mitigating supply chain risks," International Journal of Production Economics, Elsevier, vol. 116(1), pages 12-27, November.
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    Citations

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    Cited by:

    1. Song, Dong-Ping & Dong, Jing-Xin & Xu, Jingjing, 2014. "Integrated inventory management and supplier base reduction in a supply chain with multiple uncertainties," European Journal of Operational Research, Elsevier, vol. 232(3), pages 522-536.
    2. Pinior, Beate & Conraths, Franz J. & Petersen, Brigitte & Selhorst, Thomas, 2015. "Decision support for risks managers in the case of deliberate food contamination: The dairy industry as an example," Omega, Elsevier, vol. 53(C), pages 41-48.
    3. Ray, Pritee & Jenamani, Mamata, 2016. "Mean-variance analysis of sourcing decision under disruption risk," European Journal of Operational Research, Elsevier, vol. 250(2), pages 679-689.
    4. Aqlan, Faisal & Lam, Sarah S., 2015. "A fuzzy-based integrated framework for supply chain risk assessment," International Journal of Production Economics, Elsevier, vol. 161(C), pages 54-63.
    5. Blome, Constantin & Schoenherr, Tobias, 2011. "Supply chain risk management in financial crises--A multiple case-study approach," International Journal of Production Economics, Elsevier, vol. 134(1), pages 43-57, November.
    6. repec:spr:annopr:v:237:y:2016:i:1:d:10.1007_s10479-014-1649-8 is not listed on IDEAS
    7. Eng, Shao Wei Lester & Chew, Ek Peng & Lee, Loo Hay, 2014. "Impacts of supplier knowledge sharing competences and production capacities on radical innovative product sourcing," European Journal of Operational Research, Elsevier, vol. 232(1), pages 41-51.
    8. Meena, P.L. & Sarmah, S.P. & Sarkar, A., 2011. "Sourcing decisions under risks of catastrophic event disruptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1058-1074.
    9. repec:spr:annopr:v:241:y:2016:i:1:d:10.1007_s10479-013-1422-4 is not listed on IDEAS
    10. PrasannaVenkatesan, S. & Goh, M., 2016. "Multi-objective supplier selection and order allocation under disruption risk," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 124-142.
    11. Sarker, Sudipa & Engwall, Mats & Trucco, Paolo & Feldmann, Andreas, 2014. "Effects of product and supplier criticality on resilience capabilities: An empirical analysis of a global supply chain," INDEK Working Paper Series 2014/7, Royal Institute of Technology, Department of Industrial Economics and Management.
    12. Pinior, Beate & Conraths, Franz J. & Petersen, Brigitte & Selhorst, Thomas, 2015. "Reprint of “Decision support for risks managers in the case of deliberate food contamination: The dairy industry as an example”," Omega, Elsevier, vol. 57(PA), pages 114-122.
    13. Kamalahmadi, Masoud & Parast, Mahour Mellat, 2017. "An assessment of supply chain disruption mitigation strategies," International Journal of Production Economics, Elsevier, vol. 184(C), pages 210-230.
    14. Faiza Hamdi & Ahmed Ghorbel & Faouzi Masmoudi & Lionel Dupont, 0. "Optimization of a supply portfolio in the context of supply chain risk management: literature review," Journal of Intelligent Manufacturing, Springer, vol. 0, pages 1-26.
    15. Laslo, Zohar & Gurevich, Gregory & Keren, Baruch, 2009. "Economic distribution of budget among producers for fulfilling orders under delivery chance constraints," International Journal of Production Economics, Elsevier, vol. 122(2), pages 656-662, December.

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