Optimal supply diversification under general supply risks

We analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources. The necessity to employ multiple suppliers arises from the fact that when an order is placed with any of the suppliers, only a random fraction of the order size is usable. The model considers a single demand season with a given demand distribution, where all supplies need to be ordered simultaneously before the start of the season. The suppliers differ from one another in terms of their yield distributions, their procurement costs, and capacity levels.