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Robust supply base management: Determining the optimal number of suppliers utilized by contractors


  • Nam, Seong-Hyun
  • Vitton, John
  • Kurata, Hisashi


The importance of robust supply base management under demand uncertainty requires an understanding of the benefits associated with a contractor having an optimal number of suppliers. The key benefit is a reduction in a contractor's total cost of supply base management. However, few supplier-optimizing models incorporate the perspectives of both demand uncertainty and supply base management costs. The objective of this paper is twofold: (1) to investigate the dynamics between demand uncertainty and coordination; and (2) to develop a model that determines the optimal number of suppliers that a contractor should maintain in its supply base to become more flexible and maximize its profits.

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  • Nam, Seong-Hyun & Vitton, John & Kurata, Hisashi, 2011. "Robust supply base management: Determining the optimal number of suppliers utilized by contractors," International Journal of Production Economics, Elsevier, vol. 134(2), pages 333-343, December.
  • Handle: RePEc:eee:proeco:v:134:y:2011:i:2:p:333-343

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    References listed on IDEAS

    1. Kim, Bowon, 2000. "Coordinating an innovation in supply chain management," European Journal of Operational Research, Elsevier, vol. 123(3), pages 568-584, June.
    2. Ranga V. Ramasesh & J. Keith Ord & Jack C. Hayya & Andrew Pan, 1991. "Sole Versus Dual Sourcing in Stochastic Lead-Time (s, Q) Inventory Models," Management Science, INFORMS, vol. 37(4), pages 428-443, April.
    3. Yossi Aviv, 2001. "The Effect of Collaborative Forecasting on Supply Chain Performance," Management Science, INFORMS, vol. 47(10), pages 1326-1343, October.
    4. Sobrero, Maurizio & Roberts, Edward B., 2002. "Strategic management of supplier-manufacturer relations in new product development," Research Policy, Elsevier, vol. 31(1), pages 159-182, January.
    5. Kelle, P. & Silver, E. A., 1990. "Decreasing expected shortages through order splitting," Engineering Costs and Production Economics, Elsevier, vol. 19(1-3), pages 351-357, May.
    6. 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.
    7. Berger, Paul D. & Gerstenfeld, Arthur & Zeng, Amy Z., 2004. "How many suppliers are best? A decision-analysis approach," Omega, Elsevier, vol. 32(1), pages 9-15, February.
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    Cited by:

    1. 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.


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