Joint Optimization of the Number of Suppliers and the Order Quantities Considering Compensation Orders under Supply Chain Disruptions and Yield Uncertainty

Abstract

In this study, we developed an optimal sourcing strategy considering compensation orders to mitigate the supply chain disruption risks and yield uncertainty. Additionally, we proposed an approximation method that can perform quick calculations to ascertain the optimal number of suppliers and initial order quantity. Finally, by using a numerical example, we confirmed that if there is a disruption probability, it is desirable to distribute the risk by dividing the order into small portions from multiple suppliers. This study proposes an optimal procurement strategy under disruption risks and serves as a guide to establishing a procurement strategy that maximizes a firm's profit in the long term.