Sourcing Decisions for Goods with Potentially Imperfect Quality under the Presence of Supply Disruption

Laura Wagner, Mustafa Çagri Gürbüz


Dispensers (pharmacies, hospitals etc.), time and again, are faced with multiple uncertainties like demand variability, supply disruptions etc. These periods of uncertainties are exploited by some distributors to breach regulated supply chains and push sub-quality and/or non-deceptive counterfeit medicines, forcing dispensers to identify and implement measures for detection to mitigate social and financial costs. In this paper, we attempt to study dispensers’ operational replenishment policies, during times of such uncertainties, under two counterfeit detection methods: a) Post-consumption detection — Counterfeit identification based on end-consumer and medical personnel’s feedback b) Inspection prior to circulation— implementing a track-and-trace system to find the origin of doubtful medicines at the time of purchasing. In each of the two situations, we determine which strategy --single sourcing, multi-sourcing or waiting for shortage to end-- is valuable to safeguard against spurious drugs, and quantify the optimal procurement allocation to each source in a multi-supplier and multi-period setting. Intriguingly, we found cases where a cost-minimizing dispenser may lean more on post-consumption detection than inspection prior to circulation.


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Paper Citation

in Harvard Style

Wagner L. and Gürbüz M. (2014). Sourcing Decisions for Goods with Potentially Imperfect Quality under the Presence of Supply Disruption . In Doctoral Consortium - DCORES, (ICORES 2014) ISBN Not Available, pages 10-17

in Bibtex Style

author={Laura Wagner and Mustafa Çagri Gürbüz},
title={Sourcing Decisions for Goods with Potentially Imperfect Quality under the Presence of Supply Disruption},
booktitle={Doctoral Consortium - DCORES, (ICORES 2014)},
isbn={Not Available},

in EndNote Style

JO - Doctoral Consortium - DCORES, (ICORES 2014)
TI - Sourcing Decisions for Goods with Potentially Imperfect Quality under the Presence of Supply Disruption
SN - Not Available
AU - Wagner L.
AU - Gürbüz M.
PY - 2014
SP - 10
EP - 17
DO -