The impact of traceability technology and sourcing structure on ordering policy and expected profit in supply chains under disruption risks

Purpose Supply disruption emerges new features of abrupt change and fast spread. Two methods, adopting traceability technology and adjusting sourcing structure, are proposed to cope with the new disruption. This paper aims to explore the relationships between the two methods and their impact on supply disruption. Design/methodology/approach The paper uses a 2 × 2 between-subjects design to form four strategy combinations: single-sourcing and nontraceability strategy, single-sourcing and traceability strategy, double-sourcing and nontraceability strategy and double-sourcing and traceability strategy. Based on the newsboy theory, mathematical models of the four strategy combinations in the presence of supply disruptions are then developed. By analyzing and comparing the ordering policies and total profits elicited from the models, this paper determines the relationship between the sourcing structure and traceability technology and their joint and independent effects on supply disruptions. Findings The findings are as follows: joint effects: the total ordering quantity is not affected by strategy combinations, while the profit is affected by the complex strategy combinations; independent effects: a double-sourcing structure has a positive influence on the profit only when the probability of supplier-specific disruption nonoccurrence is less than the degeneration points, and traceability technology has a positive influence on the profit except at the degeneration points; interactive effects: applying a double-sourcing structure results in performance instability of traceability technology, and adopting traceability technology causes faster function loss of a double-sourcing structure. Notably, the joint effect is greater than the independent effects but smaller than their sum due to the negative influence of the two strategies on each other. Originality/value Finally, based on these findings, the authors suggest the most suitable strategies for different industries.