How many suppliers does your business need?. Charles Yung, Stephen Nolan, Kacie Satsuma, Lars Johansen, Mark Klein. Overall chain options. Strategic Supplier – Have one or few inputs Can reduce costs Transaction costs Long term contracts Building relationships. Overall chain options cont.
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Charles Yung, Stephen Nolan, Kacie Satsuma, Lars Johansen, Mark Klein
Both Fraser and Tarantino claim that “a general rule of thumb to follow is to avoid single-sourcing for any critical path part.”
-Analytics & Replenishment
nS n suppliers, n=1, 2
P(D) probability of down
Pn(D) probability that all suppliers are down
L financial loss caused by disasters of all suppliers down
C(n) operating cost of n suppliers
Linear operating cost:The Brain Teaser: Making the decision Mathematically
Non-Linear operating cost: