The pricing and sourcing strategies of competitive retailers under supply disruption in the presence of liquidated damages

Supply disruptions often make retailers face stock-outs and lead to higher selling price, which forcing retailers to adopt optimal sourcing strategies to avoid disruptions and carefully adjust their pricing when disruptions occur to achieve ideal profits in competition with other peers. In this paper, we optimize the combination of pricing levels and sourcing strategy of the competitive retailer having choices of cost or stable supplier when …