Contingent Strategies for Mitigating Supply Disruptions With Backup Supplier and Information Acquirement

This article describes pervasive supply disruptions and their impacts on supply chain performance. The retailer sources from two suppliers, one supplier is subject to disruptions and the other supplier is perfectly reliable, but more expensive. According to availability of the disruption information, the authors present four information acquirement models. The research conclusions are as follows: The effect of backup supplier is reduced with the increases of reliability coefficient; The value of information is more sensitive to reliability coefficient but less sensitive to potential market capacity; The earlier the information is available, the higher the profit of vendor is; The value of information is lower when reliability coefficient is close to 0 or 1, while information value is significant when reliability coefficient is 0.5; predetermined amount of backup supplier has nothing to do with the cost of strategic supplier, and predetermined amount of strategic supplier is also no connection with backup supplier's predetermined cost and execution cost.