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Chinese Journal of Management Science ›› 2012, Vol. ›› Issue (2): 87-92.

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The Influence of Manager’s Risk Attitude to Procurement Decision When System’s Capacity Was Partially Injured

BAO Xing, SUN Qi   

  1. School of Business Administration, Zhejiang Gongshang University, Hangzhou 310018, China
  • Received:2011-07-04 Revised:2012-01-29 Online:2012-04-29 Published:2012-04-25

Abstract: Decision-makers of some large-scaled operation system, such as communication, power grid and petrol-chemic plants, seldom obey the decision rule of "risk aversion" while the critical capacities are partially injured by unexpected events. Thus, for the aim to cut down the disruption cost, should decision maker take aggressive or conservative risk attitude while in decsioning? In order to validate this point of view, we make the extension research of reference [3], further consider two kinds of capacity support, which regular and expedite modes, and also the decision maker’s risk attitude factor when splitting the capacity orders. Through theoretic and numerical analysis, we find 3 interesting managerial insights: First, decision maker’ risk attitude is not always "the more aggressive the better"; Second, "bi-sourcing under extreme events" is not the optimal choice, Third, which does most contribution to cut down the disruption price is, decision maker should do best to obtain the recovery technique support from partnership during the disruption period.

Key words: risk attitude, capacity support, procurement during disruption

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