Biblio

We consider a pharmaceutical supply chain where the manufacturer sources a customized product with unique attributes from a set of unreliable suppliers. We model the likelihood of a supplier to successfully deliver the product via Bayesian logistic regression and use simulation to obtain the posterior distribution of the unknown parameters of this model. We study the role of so-called input-model uncertainty in estimating the likelihood of the supply failure, which is the probability that none of the suppliers in a given supplier portfolio can successfully deliver the product. We investigate how the input-model uncertainty changes with respect to the characteristics of the historical data on the past realizations of the supplier performances and the product attributes.