Effective supply chain management is essential to operational efficiency and business performance.When managing a supply chain, practitioners must carefully consider a range of issues, including inventory levels, capacity, and strategic partnerships.Although some elements of the supply chain can be planned, others cannot, including disruptions to the production process.This dissertation examines various aspects of supply chain management taking into account the critical elements of real-world dynamics of both internal and external disruptions. Such elements include disruptions to internal resources producing multiple products on dedicated and shared resources, as well as disruptions to external suppliers of manufacturers.In the first essay, we explore the effect of internal disruptions that manifest themselves through capacity uncertainty and study their effect on the production and inventory policies of a firm that produces multiple products in multiple stages. Focusing on a two-product case, we derive the optimal production and inventory policies and propose heuristic policies for the case of more than two products.In the second essay, we explore the effects of external disruptions on a firm;;s supply chain strategy and its inventory policy. This essay carefully disentangles the active role suppliers play in defining the parameters of contracts and its effect on the firm;;s resulting sourcing practices. The main insight we provide is that with endogenously determined wholesale prices, the manufacturer does not necessarily benefit from flexible sourcing, whereas the suppliers may benefit.
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Strategic Supply Chain Management with Multiple Products under Supply and Capacity Uncertainty.