Supply risk and inventory outsourcing

C. S. Tapiero, A. Grando

Research output: Contribution to journalArticlepeer-review


This paper considers the 'inventory outsourcing problem when the supplier is a leader having full information of the outsourcing firm's demand distributions and parameters. This leads to a Stackleberg game which is solved under a number of cases. Both demand dependent and independent models are considered, the latter resulting from (statistical) risk aggregation of firms demands operating in correlated markets. A number of examples are also solved in order to highlight essential risk related and costs issues underlying inventory outsourcing. For practical purposes, a scenario-based linear programming problem is formulated to resolve the supplier's problem in any scenario set.

Original languageEnglish (US)
Pages (from-to)534-539
Number of pages6
JournalProduction Planning and Control
Issue number5
StatePublished - Jul 1 2006


  • Inventories
  • Risk
  • Supply chains

ASJC Scopus subject areas

  • Computer Science Applications
  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering


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