Date of Award
Monte Ahuja College of Business
Business logistics -- Planning, Risk management, Industrial procurement, supply chain management supply chain disruption quality knowledge transfer supplier development swift knowledge transfer quality improvement
I investigate the effect of supply-chain disruption on a firm's decisions on investment in quality, and on ordering decisions, when there is a choice between suppliers, and a variable rate of knowledge transfer. I find that supply-chain disruption has a negative effect on profit, which can be mitigated by appropriate policies for order allocation and supplier development. When the probability of disruption is high, the firm should seek alternative sources of supply (even if they have lower levels of quality). Under certain conditions, the firm can improve its profit by investing in quality improvement efforts at the alternative supplier. I consider three different policies for supply-chain management and quality investment, and find that investment in supplier development is warranted when the initial quality level of the new supplier is relatively low when the expected rate of improvement from such investment is relatively high when the effectiveness of inspection is relatively low and when the cost of inspection is relatively high
Clemons, Rebecca E., "Examining the Impact of Disruption, Supplier Quality and Knowledge Transfer: Recommended Strategies for Meeting Demand and Supplier Development" (2014). ETD Archive. 68.