Volume flexibility at responsive suppliers in reshoring decisions: Analysis of a dual sourcing inventory model Vlerick Business School
We investigate how volume exibility, de ned by a sourcing cost premium beyond a base capacity, at a local responsive supplier impacts the decision to reshore supply. The buyer also has access to a remote supplier that is cheaper with no restrictions on volume exibility. We show that with unit lead time difference between both suppliers, the optimal dual sourcing policy is a modi ed dual base-stock policy with three base-stock levels Sf2 , Sf1 , ...