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Supply Chain Disruptions Preparedness Measures Using a Dynamic Model

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Supply Chain Risk Management

Abstract

Supply chain risk management has recently seen extensive research efforts, but questions such as “How should a firm plan for each type of disruption?” and “What are the strategies and the total cost incurred by the firm if a disruption occurs?” continue to deserve attention. This chapter analyzes different disruption cases by considering the impacts of disruptions at a supplier, a firm’s warehouse, and at the firm’s production facility. The firm can prepare for each type of disruption by buying from an alternate supplier, holding more inventory, or holding inventory at a different warehouse. The Wagner-Whitin model is used to solve the optimal ordering strategy for each type of disruption. Since the type of disruption is uncertain, we assign probabilities for each disruption and use the Wagner-Whitin model to find the order policy that minimizes the firm’s expected cost.

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Authors and Affiliations

  1. Department of Industrial and Manufacturing Systems Engineering, Iowa State University, Ames, USA

    Amit Sonar & Cameron A. Mackenzie

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  1. Amit Sonar
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  2. Cameron A. Mackenzie
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Correspondence to Amit Sonar .

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Editors and Affiliations

  1. Graduate Program in Business and Development Studies, Sophia University, Tokyo, Japan

    Yacob Khojasteh

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Sonar, A., Mackenzie, C.A. (2018). Supply Chain Disruptions Preparedness Measures Using a Dynamic Model. In: Khojasteh, Y. (eds) Supply Chain Risk Management. Springer, Singapore. https://doi.org/10.1007/978-981-10-4106-8_8

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