We examine a supply base diversification problem faced by a buyer who periodically holds auctions to award short term supply contracts among a cohort of suppliers (i.e., the supply base). To mitigate significant cost shocks to procurement, the buyer can diversify her supply base by selecting...

The average US manufacturer spends 40-60% of its revenue to procure goods and services. Transcending its more tactical beginnings in vertically integrated firms, today the procurement function serves as a vital gatekeeper to low-cost and low-risk inputs for a firm. Strategic procurement involves...