Temporal distance in dual sourcing: A behavioural investigation

Abstract

We explored the influence of temporal distances on order allocation between a low-cost, less reliable supplier and a reliable, high-cost supplier. We posited that a far temporal distance increases the preference for the unreliable, low-cost supplier. We conducted a vignette-based experiment where participants placed orders between the suppliers with different reliability and cost levels. Our experiment showed that a longer lead time led to larger orders for the low-cost unreliable supplier. Our insights help explain how temporal distances inherent in supply chains can elicit differing evaluations of suppliers, altering ordering decisions.