Retailer’s Optimal Procurement Strategy under Supply Disruption and Stochastic Demand: Backup Sourcing or Simultaneous Sourcing

<div>The retailer’s expected profit under different values of <span class="nowrap"><svg height="10.2124pt" id="M286" style="vertical-align:-3.42943pt" version="1.1" viewbox="-0.0498162 -6.78297 7.83752 10.2124" width="7.83752pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M570 304C570 398 525 448 414 448C385 448 343 445 312 434L329 511L321 518C297 504 262 482 244 460L233 411C195 397 159 381 128 358L135 332C160 347 189 360 224 373L111 -147C97 -210 84 -218 17 -231L13 -257L254 -247L259 -218L233 -216C183 -212 177 -202 189 -142L218 -1C238 -10 266 -12 283 -12C351 3 429 48 483 105C543 168 570 242 570 304ZM482 289C482 161 380 33 304 33C278 33 248 51 233 69L303 396C326 400 352 403 369 403C428 403 482 380 482 289Z"></path></g></svg>,</span> <span class="nowrap"><svg height="9.25202pt" id="M287" style="vertical-align:-3.29111pt" version="1.1" viewbox="-0.0498162 -5.96091 8.2665 9.25202" width="8.2665pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M383 397C383 424 344 448 299 448C244 448 172 409 132 375C66 319 23 227 23 146C23 42 74 -12 146 -12C208 -12 298 30 359 103L343 124C315 95 248 48 192 48C145 48 111 85 111 163C111 228 129 294 151 330C171 363 201 401 241 401C275 401 302 384 325 356C332 347 339 344 348 348C373 360 383 381 383 397Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,4.173,3.132)"><path d="M357 391C357 416 325 451 270 451C241 451 179 431 146 400C109 365 97 334 97 307C97 248 143 213 196 180C250 146 261 123 261 101C261 75 237 40 190 40C153 40 110 72 86 109C81 116 68 119 55 112C37 102 24 87 24 66C24 30 85 -12 137 -12C229 -12 331 62 331 140C331 189 304 218 236 260C197 284 164 309 164 346C164 381 194 400 220 400C259 400 282 380 304 350C310 342 321 339 330 344C347 353 357 372 357 391Z"></path></g></svg>,</span> and <span class="nowrap"><svg height="9.39034pt" id="M288" style="vertical-align:-3.42943pt" version="1.1" viewbox="-0.0498162 -5.96091 7.34167 9.39034" width="7.34167pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M538 96L524 119C492 88 454 63 446 63C439 63 434 70 440 101C463 223 491 341 518 448H508L433 422L401 276C355 192 240 56 188 56C163 56 154 89 163 133C184 233 207 338 235 443L230 448L152 424L58 17C40 -60 23 -143 23 -185C23 -241 42 -261 63 -261C92 -261 117 -241 125 -227L124 -221C109 -209 89 -165 89 -103C89 -55 96 -13 105 26H107C121 -3 134 -12 151 -12C172 -12 194 -5 221 16C279 61 330 124 384 194H386C381 159 377 141 368 105C343 3 363 -12 383 -12C416 -12 486 35 538 96Z"></path></g></svg>.</span></div>

Complexity

fig2

Figure 2

Figure 2: Retailer’s Optimal Procurement Strategy under Supply Disruption and Stochastic Demand: Backup Sourcing or Simultaneous Sourcing 