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Scenario-based Supply Chain Network risk modeling

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  • Klibi, Walid
  • Martel, Alain

Abstract

This paper provides a risk modeling approach to facilitate the evaluation and the design of Supply Chain Networks (SCNs) operating under uncertainty. The usefulness of the approach is demonstrated with two realistic case studies. Three event types are defined to describe plausible future SCN environments: random, hazardous and deeply uncertain events. A three-phase hazard modeling approach is also proposed. It involves a characterization of SCN hazards in terms of multihazards, vulnerability sources and exposure levels; the estimation of incident arrival, intensity and duration processes; and the assessment of SCN hit consequences in terms of damage and time to recovery. Based on these descriptive models, a Monte Carlo approach is then proposed to generate plausible future scenarios. The two cases studied illustrate the key aspects of the approach, and how it can be used to obtain resilient SCNs under disruptions.

Suggested Citation

  • Klibi, Walid & Martel, Alain, 2012. "Scenario-based Supply Chain Network risk modeling," European Journal of Operational Research, Elsevier, vol. 223(3), pages 644-658.
  • Handle: RePEc:eee:ejores:v:223:y:2012:i:3:p:644-658 DOI: 10.1016/j.ejor.2012.06.027
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    References listed on IDEAS

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    1. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    2. Bilsel, R. Ufuk & Ravindran, A., 2011. "A multiobjective chance constrained programming model for supplier selection under uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1284-1300, September.
    3. Azaron, A. & Brown, K.N. & Tarim, S.A. & Modarres, M., 2008. "A multi-objective stochastic programming approach for supply chain design considering risk," International Journal of Production Economics, Elsevier, vol. 116(1), pages 129-138, November.
    4. Robert J. Lempert & David G. Groves & Steven W. Popper & Steve C. Bankes, 2006. "A General, Analytic Method for Generating Robust Strategies and Narrative Scenarios," Management Science, INFORMS, vol. 52(4), pages 514-528, April.
    5. Kevin B. Hendricks & Vinod R. Singhal, 2005. "Association Between Supply Chain Glitches and Operating Performance," Management Science, INFORMS, vol. 51(5), pages 695-711, May.
    6. Klibi, Walid & Martel, Alain & Guitouni, Adel, 2010. "The design of robust value-creating supply chain networks: A critical review," European Journal of Operational Research, Elsevier, vol. 203(2), pages 283-293, June.
    7. Yossi Sheffi, 2005. "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693496, January.
    8. Santoso, Tjendera & Ahmed, Shabbir & Goetschalckx, Marc & Shapiro, Alexander, 2005. "A stochastic programming approach for supply chain network design under uncertainty," European Journal of Operational Research, Elsevier, vol. 167(1), pages 96-115, November.
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    Citations

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    Cited by:

    1. Keyvanshokooh, Esmaeil & Ryan, Sarah M. & Kabir, Elnaz, 2016. "Hybrid robust and stochastic optimization for closed-loop supply chain network design using accelerated Benders decomposition," European Journal of Operational Research, Elsevier, vol. 249(1), pages 76-92.
    2. Fan, Lei & Wilson, William W. & Dahl, Bruce, 2015. "Risk analysis in port competition for containerized imports," European Journal of Operational Research, Elsevier, vol. 245(3), pages 743-753.
    3. Tang, Liang & Jing, Ke & He, Jie & Stanley, H. Eugene, 2016. "Robustness of assembly supply chain networks by considering risk propagation and cascading failure," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 459(C), pages 129-139.
    4. Yanyan Yang & Shenle Pan & Eric Ballot, 2016. "Performance evaluation of interconnected logistics networks confronted to hub disruptions," Post-Print hal-01320641, HAL.
    5. Heckmann, Iris & Comes, Tina & Nickel, Stefan, 2015. "A critical review on supply chain risk – Definition, measure and modeling," Omega, Elsevier, vol. 52(C), pages 119-132.
    6. Ting-Kwei Wang & Qian Zhang & Heap-Yih Chong & Xiangyu Wang, 2017. "Integrated Supplier Selection Framework in a Resilient Construction Supply Chain: An Approach via Analytic Hierarchy Process (AHP) and Grey Relational Analysis (GRA)," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-26, February.
    7. Ruiying Li & Qiang Dong & Chong Jin & Rui Kang, 2017. "A New Resilience Measure for Supply Chain Networks," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-19, January.
    8. Schmitt, Thomas G. & Kumar, Sanjay & Stecke, Kathryn E. & Glover, Fred W. & Ehlen, Mark A., 2017. "Mitigating disruptions in a multi-echelon supply chain using adaptive ordering," Omega, Elsevier, vol. 68(C), pages 185-198.
    9. repec:eee:ejores:v:264:y:2018:i:1:p:280-293 is not listed on IDEAS
    10. repec:eee:jomega:v:73:y:2017:i:c:p:60-78 is not listed on IDEAS
    11. Ben Jouida, Sihem & Krichen, Saoussen & Klibi, Walid, 2017. "Coalition-formation problem for sourcing contract design in supply networks," European Journal of Operational Research, Elsevier, vol. 257(2), pages 539-558.

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