We consider a risk-averse rm that utilizes dual-sourcing for perishable or seasonal goods with uncertain customer demand. Using real options theories, we provide two models aimed at determining optimal order quantities to maximize the rm's expected prot. Furthermore, we can consider the demand to be an observable process correlated to a traded, which can be hedged to reduce prot uncertainty. A single oshore single local order period (SOSLOP) model provides a pseudo-analytical solution which can be easily solved to determine an optimal oshore and local order quantities based on the manufacturers' lead times, and a more realistic single oshore multiple local order period (SOMLOP) model uses numerical methods to determine optimal order quantities. Finally, a method for matching distributions of expected demands based on managerial estimates can be applied to any of the aforementioned models and be easily incorporated into the industry.