Backup Sourcing Decisions for Coping with Supply Disruptions under Long-Term Horizons

Table 1

Major results of single sourcing with contingent backup supply.

Properties	Results
The value of contingent supply	Under small disruption risks, the buyer would benefit from the contingent supplier, especially the one with larger capacity.	Under large disruption risks, the buyer would stock more instead of using a contingent supplier.
The impact of disruption risks	Larger disruption probability increases both the buyer’s optimal base-stock level and expected cost.
The impact of backup capacity	Larger backup capacity increases the buyer’s optimal base-stock level.
The impact of backup uncertainty	Larger backup uncertainty increases both the buyer’s optimal base-stock level and expected cost.