Strategic sourcing in forward and spot markets with reliable and unreliable suppliers

We study sourcing and purchasing strategies of a monopolistic retailer in a market with a reliable but expensive supplier and an unreliable but cheap supplier with random yield. The retailer can solely source from either supplier or adopt dual sourcing in the forward market while engaging in spot trade. Our study shows that the retailer's relative reliance on forward sourcing is lessened in the presence of a reliable supplier with higher cost,...