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- W2305790859 abstract "Dual sourcing practices have become increasingly popular with firms. To examine the actual behavior in such settings, we conducted a laboratory experiment with a multi-period single-echelon inventory model with a fast, expensive and a slow, inexpensive supplier. Compared to single-sourcing, the difference between the normatively achievable and the empirically realized cost decreases considerably. We find that the overusage of the fast supplier is driven by reference-dependent preferences. In general, subjects use order smoothing strategies and tend to choose a preferred supply mode. Furthermore, the individual variation in cognitive reflection drives cost differences: Subjects with a higher cognitive score have less random errors, order smoothing and supply line underweighting; they also overuse the fast option to a smaller extent. Our findings highlight the importance of having procurement professionals with a high cognitive reflection and the benevolent nature of the additional supply mode primarily due to its lower lead time." @default.
- W2305790859 created "2016-06-24" @default.
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- W2305790859 date "2015-01-01" @default.
- W2305790859 modified "2023-10-12" @default.
- W2305790859 title "Behavioral Decisions in Inventory Systems with Dual Sourcing Option: An Experiment" @default.
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- W2305790859 doi "https://doi.org/10.2139/ssrn.2573565" @default.
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