Optimal Procurement Policies of a Socially Responsible Buyer for Goods from Genuine and Potentially Counterfeit Sources
Lunes 19 de diciembre, 12:00h | Sala de Rectorado, UTDT
Job Talk
Abstract: The struggle for higher service levels may force intermediaries (e.g., hospitals, retailers) to turn to alternative suppliers when their trusted/primary suppliers are unavailable due to random disruptions. However, these alternative suppliers may not carry genuine goods of higher quality. In this paper, we prove the optimality of state-dependent order-up-to level replenishment policies under different liability schemes for an intermediary with access to (i) one genuine supplier subject to random disruptions, and (ii) an alternative supplier offering the same good, but of dubious quality. When the intermediary is fully liable for products resold to third parties at the end of the planning horizon, the problem turns out to be equivalent to a multi-period inventory control problem with random demand and procurement cost. Optimal cost for the full liability case serves as an upper bound for the case where the intermediary is not held liable for the salvaged goods (limited liability). We find that the intermediary buys from the alternative supplier in many cases, even if it employs responsible sourcing practices. We perform sensitivity analysis of the optimal order quantities and costs to identify critical problem parameters and shed light on the incentives of supply chain members to combat counterfeit.
Speaker: Laura Wagner, Postdoctoral Fellow, IESE Business School University of Navarra, Barcelona, Spain.
Speaker: Laura Wagner, Postdoctoral Fellow, IESE Business School University of Navarra, Barcelona, Spain.