The Importance of Decoupling Recurrent and Disruption Risks in a Supply Chain


This paper focuses on the importance of decoupling recurrent supply risk and disruption risk when planning appropriate mitigation strategies. We show that bundling the two uncertainties leads a manager to underutilize a reliable source while over utilizing a cheaper but less reliable supplier. As in Dada, Petruzzi and Schwarz [6], we show that increasing… (More)