Risk-averse outsourcing strategy in the presence of demand and supply uncertainties

Esmaeili-Najafabadi, Elham; Azad, Nader; Pourmohammadi, Hamid; Nezhad, Mohammad Saber Fallah

doi:10.1016/j.cie.2020.106906

Cited by 11 publications

(4 citation statements)

References 57 publications

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“…Michael's empirical results (2017) also showed that supply uncertainty has a negative efect on logistics performance, the greatest efect of supply uncertainty being from outside frms in the Australian express industry. Esmaeili-Najafabadi et al [32] investigated outsourcing strategies with supply uncertainties and two types of demand for risk-averse decision makers. Zhao et al [33] investigated the optimal decisions of a supply chain with a risk-averse retailer and one risk-neutral supplier to derive the condition for the supply chain to be coordinated.…”

Section: Te Newsvendor Problem Of Supply Uncertaintymentioning

confidence: 99%

Effects of Supply Reliability, Risk Aversion, and Wealth on Retailer’s Optimal Order Strategy

Peng

Ya-wei

Zou

et al. 2022

Mathematical Problems in Engineering

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This study examines the effects of supply reliability, risk aversion, and wealth on the optimal order strategy of retailers in the case of uncertain demand by measuring the degree of risk aversion. A more practical model of optimal ordering strategy is proposed, considering supply reliability, demand uncertainty, risk aversion, and retailer wealth, in which two random variables, supply reliability factors and demand, are introduced into the retailer’s function of expected utility. To avoid nonconvergence at both ends, the demand follows a triangular rather than a normal distribution. It is found that the optimal order quantity will increase with the improvement of supply reliability when the risk-averse degree is fixed. The results also show that the optimal order quantity of risk-averse retailers is smaller than that of risk-neutral retailers. Additionally, the optimal order quantity for the risk-averse retailer decreases as the degree of risk aversion increases, when supply reliability is fixed. Further research shows that the retailer is a constant absolute risk aversion (CARA). That means retailer’s wealth has nothing to do with the risk aversion and changes in the retailer’s wealth will not affect the retailer’s optimal order quantity. This study provides valuable insights for sustainable supply chain management and marketing.

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Section: Te Newsvendor Problem Of Supply Uncertaintymentioning

confidence: 99%

Effects of Supply Reliability, Risk Aversion, and Wealth on Retailer’s Optimal Order Strategy

Peng

Ya-wei

Zou

et al. 2022

Mathematical Problems in Engineering

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show abstract

“…A supply chain consisting of an original equipment manufacturer (OEM) and a contract manufacturer (CM) is investigated, in which the CM is also a competitor of the OEM [34][35][36][37][38]. Chen et al and Esmaeili-Najafabadi et al studied outsourcing strategies by considering multi-dimensional uncertainties [39,40]. The aforementioned literature does not consider environmental issues and the effect of CEA information asymmetry.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Green Supply Chain Design and Environment [3,[8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23] Information Acquisition and Disclosure [7,[24][25][26][27][28][29][30][31][32][33] Outsourcing Decisions [34][35][36][37][38][39][40]…”

Section: Literature Streams Related Literature This Papermentioning

confidence: 99%

Information Acquisition for Product Design in a Green Supply Chain

Yang

Wei

2022

Mathematics

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This paper studies the interaction between the product development mode and the acquisition of consumers’ environmental awareness (CEA) information in a two-echelon green supply chain. Our study shows that when the downstream manufacturer achieves the CEA information superiority, the in-house mode improves the total environmental quality and is better for supply chain members than the outsourcing mode. In contrast, when the upstream supplier achieves the information advantage, the green product development modes affect neither the decisions nor the performance of supply chain members because the supplier discloses its CEA information through pricing and/or green level decisions. We further find that under the outsourcing mode, the supplier has more incentive to achieve CEA information superiority, which always improves the total environmental quality and may benefit the manufacturer; however, under the in-house mode, the supplier’s superior information benefits the manufacturer and itself as well as total environmental quality only under certain conditions. Finally, we show that the downstream CEA information disclosure under the outsourcing mode helps supply chain members achieve a Pareto improvement and increases the total environmental quality; this finding is contrary to the extant literature that focuses on demand intercept information disclosure.

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“…Manufacturing companies are currently concerned about supply chain disruptions, including those affecting supply, production, and demand. Among various disruptions, production disruption is essential in achieving production plans, resulting from process uncertainty related to machine availability, yields, quality, and processing times (Bo et al, 2021;Esmaeili-Najafabadi et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Proactive Manufacturing Strategy for Managing the Multiproduct Production Plan

Widiatmaka,

Cahyo

2024

JRSI

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The case study focuses on a multi-product company in Indonesia that aims to develop a proactive manufacturing strategy to tackle production disruptions caused by process uncertainty. Data from 30 periods are analyzed to evaluate the company's weekly production plan performance, revealing consistent quantity fulfillment but significant discrepancies in the types of products produced compared to the plan. Process uncertainty, especially regarding quality, leads to disruptions such as uneven and inadequate material supplies. Statistical Process Control (SPC) tools, like Pareto analysis, are used to identify priority quality issues, forming the basis for Fault Tree Analysis (FTA) to trace root causes and determine intervention points. Each machine's limited set of valves and pipes poses challenges for thorough cleaning during downtime and quality management outside working hours. Introducing backup valves and pipes per machine can mitigate these issues and improve production efficiency. Companies can implement procurement strategies for pipes and valves to prevent dirty prints in the primary process, ensuring smooth material supply and minimizing disruptions. Although actual production plan achievement hasn't reached 100%, this strategy has the potential to increase product sales by 3.31% by reducing the rejection ratio of dirty prints. Ultimately, proactive procurement of spare pipes and valves is expected to increase production efficiency by 4%, indicating enhanced production schedule stability.

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Risk-averse outsourcing strategy in the presence of demand and supply uncertainties

Cited by 11 publications

References 57 publications

Effects of Supply Reliability, Risk Aversion, and Wealth on Retailer’s Optimal Order Strategy

Effects of Supply Reliability, Risk Aversion, and Wealth on Retailer’s Optimal Order Strategy

Information Acquisition for Product Design in a Green Supply Chain

Proactive Manufacturing Strategy for Managing the Multiproduct Production Plan

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