Realistic ranking of exclusive supplier strategies based on the evaluation of real value of the risks in the supply chain

Abstract

Risks play an important role in supply chain vulnerability, performance maintenance, and competitive advantage. Through adopting strategies by the exclusive supplier, the potential risks in the supply chain become actual. The risk interdependencies are not involved in the effectiveness of selecting the appropriate strategy. Since a risk may be influenced by another risk in a desirable or undesirable way, estimation of the real risk value is necessary. In this paper, first, the real weight of the actual risks for each strategy is specified through a new approach. Then, considering risk interdependency effects, the amount of increase or decrease in a risk value is determined by proposing an improved DEMATEL method. The real value of each risk is a combination of factors such as real weight, actual value, and sensitivity to other risk effects. Finally, the value of objective functions for each strategy is determined and all strategies will be re-ranked by the proposed approach (three-dimensional integrated mean method). However, the proposed method is used for ranking of Exclusive Supplier Strategies or decision in this paper, but it can be used for many decision-making procedures.

Appendices

Appendix A: Calculation of the weight of risks for first priority strategy in the exclusive supplier

• 1. Comparative matrices for 10 expert opinions about the level of risks with the exclusive supplier:

The opinions of 10 experts are integrated into the geometric mean, as 5.52 is calculated for instance in this way:

$$(6 \times \ldots \times 7)^{{\frac{1}{10}}} = 5.52$$

In the following, the relative weight of the risks with the exclusive supplier in the integration matrix is specified by normalization method:

• 2. Risk weights at the level of risks with manufacturers:

• 3. Risk weights at the level of risks with distributor:

• 4. Weight at the level of supply chain members with capacity:

• 5. Weight at the level of supply chain members with price:

• 6. Multiplication of the matrices of relative weights and determination of the final weight of risks:

As a sample:

$$\begin{aligned} {\text{Final Weight of SR}}2 = \hfill \\ \left[ {\left[ {\left( { 0.62 \times 0.71} \right) + \left( { 0.63 \times 0.19 } \right)} \right.} \right. \hfill \\ \left. { + \left( { 0.68 \times 0.10} \right)} \right] \times 0.7 \hfill \\ \left[ {\left( { 0.62 \times 0.67} \right) + \left( { 0.63 \times 0.23 } \right)} \right.\left. {} \right] \hfill \\ \left. { + \left( { 0.68 \times 0.10 } \right)} \right] \times 0.3 = 0.627 \hfill \\ \end{aligned}$$

Appendix B: Calculating the sensitivity to risk effects for first priority strategy of the exclusive supplier:

• 1. Comparative matrices of 10 expert opinions on the risk interdependencies with the improved DEMATEL method:

  

  

  $$\alpha = {\text{Min }}\left[ {\frac{ 1}{1} , \frac{ 1}{0. 8 6}} \right]{ = 1 }$$

• 2. Matrix N, matrix I–N, matrix $\left( {{\text{I}} - {\text{N}}} \right)^{ - 1}$ and matrix of total relationships (S):

  ${\text{N}} = \alpha \times {\text{M}}$ and $S = N \times \left( {I - N} \right)^{ - 1}$