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Wholesale price bids commonly occur in procurement auctions where dual sourcing is usually employed to mitigate supply risks. When at most two winners are required, unreliable wholesale price bidders face the unique trade‐off between unit margin and quantity allocation that depends on both winners' bids and the reliabilities. Motivated by above facts and considerations, we investigate several auction...
Supply risk is one of the most important enterprise risks. Dual sourcing and backup production are the two operational strategies that firms most commonly use to mitigate supply risk. The base model examines the strategic use of dual sourcing and backup supply options in a two-stage dynamic programming model for one period. In the first stage the firm decides whether to employ single or dual sourcing...
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