A firm often has multiple sourcing options for its product. Some suppliers may have longer lead times but offer lower prices, whereas reliable suppliers with quick response capabilities may have higher prices. Purchasing from a cheaper, less reliable supplier can help a firm lower its inventory...

Recent theories propose that intermediate inputs can induce an operating hedging that decrease expected return. Empirically, using the input-output tables of the BEA I find that industries whose fraction of total intermediate inputs purchased to total value added is higher, and lower expected...