Research Article

Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring

Volume: 24 Number: 53 September 29, 2025
TR EN

Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring

Abstract

The extreme congestion caused by the pandemic at shipment routes demonstrated the potential damage fluctuations in customer order lead time could cause in global supply chains. Furthermore, if the order arrives with missing items, it will exacerbate the already disrupted flow of goods in the supply chain. Hence, yield uncertainty needs to be considered, especially when coupled with lead time fluctuations. Thus, supplier selection mechanisms could benefit from a comparison of supplier performances combining yield and lead time uncertainty under different combinations of other factors. To demonstrate the consequences of supplier selection based on these effects, we developed a stochastic optimization model for an order placed by a Tier 1 supplier with a Tier 2 supplier. We generated scenarios via 2k factor representation to calculate the effect of increasing production yield and mean lead time on supply chain costs. We have found that the magnitude of the effect of increasing the lead time on total supply chain costs was much higher than the magnitude of the effect of increasing the production yield. We further found that the magnitude of the effects of these two supplier characteristics was more pronounced if at least two of the other three factors -unit underage cost, order amount, and unit procurement or tardiness cost- were high. Our numerical analysis also demonstrated that it was very important to put effort into estimating lead time parameters and distribution correctly, as making incorrect assumptions could cause severe underestimation of supply chain costs.

Keywords

Supporting Institution

None

Ethical Statement

This study has been conducted in accordance with the principles of scientific ethics. Throughout the research process, unethical practices such as plagiarism, fabrication, falsification, redundant publication, salami slicing, and unjustified authorship have been strictly avoided. All sources cited in the article have been properly referenced, and academic integrity has been upheld. The study does not involve any data requiring ethical committee approval, such as human or animal subjects.

References

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Details

Primary Language

English

Subjects

Production and Operations Management

Journal Section

Research Article

Publication Date

September 29, 2025

Submission Date

March 10, 2025

Acceptance Date

September 13, 2025

Published in Issue

Year 2025 Volume: 24 Number: 53

APA
Bayram, O. (2025). Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi, 24(53), 693-736. https://doi.org/10.46928/iticusbe.1654814
AMA
1.Bayram O. Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi. 2025;24(53):693-736. doi:10.46928/iticusbe.1654814
Chicago
Bayram, Orkun. 2025. “Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring”. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi 24 (53): 693-736. https://doi.org/10.46928/iticusbe.1654814.
EndNote
Bayram O (September 1, 2025) Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi 24 53 693–736.
IEEE
[1]O. Bayram, “Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring”, İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi, vol. 24, no. 53, pp. 693–736, Sept. 2025, doi: 10.46928/iticusbe.1654814.
ISNAD
Bayram, Orkun. “Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring”. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi 24/53 (September 1, 2025): 693-736. https://doi.org/10.46928/iticusbe.1654814.
JAMA
1.Bayram O. Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi. 2025;24:693–736.
MLA
Bayram, Orkun. “Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring”. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi, vol. 24, no. 53, Sept. 2025, pp. 693-36, doi:10.46928/iticusbe.1654814.
Vancouver
1.Orkun Bayram. Yield Uncertainty and Tardiness Penalties: A Comparison of Offshoring and Nearshoring. İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi. 2025 Sep. 1;24(53):693-736. doi:10.46928/iticusbe.1654814