We study hedging cash flow risks in a supply chain where firms invest internal funds to improve production efficiencies. We offer a decomposition framework to capture the cost reduction and flexibility effect of hedging. It allows us to understand how a firm's hedging choice depends on its...

Problem definition: Manufacturers' production capacity may be disrupted as a result of a pandemic outbreak, trade frictions, military conflicts, etc. This paper develops a two-period supply chain model with disruption risk in the second period to investigate firms' inventory decisions and the...

In recent years, global supply chains face great challenges driven by events such as trade wars, the Covid-19 pandemic, and the Russia-Ukraine War. Since the disruptions caused by such shocks are more systematic and the duration is harder to predict compared to natural disasters or other...