Efficient vs. Responsive supplier selection for functional and innovative products : A quantitative study

Fisher’s (1997) conceptual framework of building efficient supply chains for functional products and responsive supply chains for innovative products is one of the earliest and most widely discussed guidelines in supply chain management. Previous research has largely focused on qualitative and conceptual studies. The emergence of supply chain analytics, and technical developments for that, has made the missing analytical guideline more apparent. In this paper, we develop a quantitative model to perform analytics on this decision making for managers. We formulate the problem as a supplier selection problem for the product type considered and develop a continuous review inventory model with EOQ ordering reflecting Fisher’s (1997) qualitative discussion. Our model helps us present quantitative analytics of the above guideline. Our analysis shows that overoptimism about the forecast accuracy and overconfidence about the service level for an innovative product are the main reasons behind the common mismatch (i.e., using efficient supply chains for innovative products) in selecting the right supply chain. Full paper available at https://doi.org/10.1016/j.ijpe.2022.108656