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Research on Manufacturer's Sourcing Strategies in the Face of Uncertain Supply Disruptions Risk

  • Junjin Wang ,
  • Songjun Xu ,
  • Jiaguo Liu
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  • 1.School of Maritime Economics and Management,Dalian Maritime University,Dalian 116026,China
    2.Antai College of Economics & Management,Shanghai Jiao Tong University,Shanghai 200030,China

Received date: 2023-10-30

  Revised date: 2024-01-09

  Online published: 2025-01-02

Abstract

More and more suppliers are facing uncertain disruptions, and they do not know if and when disruptions will occur. Underestimating or overestimating the supply reliability may lead to over- or under-sourcing. A signaling game model of supply reliability is constructed for the manufacturer sourcing problem with uncertain supply disruptions risk. Manufacturer can source from a single supplier who is initially uncertain, or supplement from a reliable supplier with high cost, forming dual-sourcing. It focuses on signal quality effects, uncertainty effects and optimal sourcing strategies under different information conditions in this paper. The findings suggest that manufacturer needs to pay information rents to high-reliability supplier to prevent it from imitating low-reliability supplier under supply disruptions information asymmetry. Improving signal quality or reducing uncertainty about disruptions is not necessarily beneficial to the manufacturer, who can reduce the negative effects of information asymmetry by adjusting its sourcing strategies. In addition, when the supplier cost differences are moderate, a larger market size can hedge against the risk of switching sourcing strategies due to poor information.

Cite this article

Junjin Wang , Songjun Xu , Jiaguo Liu . Research on Manufacturer's Sourcing Strategies in the Face of Uncertain Supply Disruptions Risk[J]. Chinese Journal of Management Science, 2024 , 32(12) : 269 -277 . DOI: 10.16381/j.cnki.issn1003-207x.2023.1801

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