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Risk assessment for the supply chain of fast fashion apparel industry: a system dynamics framework

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  • Marzieh Mehrjoo
  • Zbigniew J. Pasek

Abstract

With the rapid progress of science and technology and continuously growing customer expectations, share of merchandise exhibiting characteristics of perishability is on the rise and a wide range of industries are affected by this phenomenon. This paper focuses on the fast fashion apparel industry due to its particular characteristics such as short life cycle products, volatile demand, low predictability, high level of impulse purchase, high level of price competition and global sourcing. A system dynamics model is proposed for analysing the behaviour and relationships of the fast fashion apparel industry with three supply chain levels. The Conditional Value at Risk measure is applied to quantify the risks associated with the supply chain of these products and also to determine the expected value of the losses and their corresponding probabilities. Multiple business situations for effective strategic planning and decision-making are generated. In particular, the impact of lead time and delivery delays on the supply chain performance (inventory, cost, backlog and risk) is analysed as the key to success for this industry is to satisfy customers’ needs in the shortest time.

Suggested Citation

  • Marzieh Mehrjoo & Zbigniew J. Pasek, 2016. "Risk assessment for the supply chain of fast fashion apparel industry: a system dynamics framework," International Journal of Production Research, Taylor & Francis Journals, vol. 54(1), pages 28-48, January.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:1:p:28-48
    DOI: 10.1080/00207543.2014.997405
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    Citations

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    Cited by:

    1. Rina Tanaka & Aya Ishigaki & Tomomichi Suzuki & Masato Hamada & Wataru Kawai, 2019. "Data Analysis of Shipment for Textiles and Apparel from Logistics Warehouse to Store Considering Disposal Risk," Sustainability, MDPI, vol. 11(1), pages 1-14, January.
    2. Mohammadi, Mir Ahmad & Sayadi, Ahmad Reza & Khoshfarman, Mahsa & Husseinzadeh Kashan, Ali, 2022. "A systems dynamics simulation model of a steel supply chain-case study," Resources Policy, Elsevier, vol. 77(C).
    3. Quan Zhu & Harold Krikke & Marjolein C. J. Caniëls, 2021. "The Effects of Different Supply Chain Integration Strategies on Disruption Recovery: A System Dynamics Study on the Cheese Industry," Logistics, MDPI, vol. 5(2), pages 1-18, April.
    4. Nishat Alam Choudhary & Shalabh Singh & Tobias Schoenherr & M. Ramkumar, 2023. "Risk assessment in supply chains: a state-of-the-art review of methodologies and their applications," Annals of Operations Research, Springer, vol. 322(2), pages 565-607, March.
    5. Rajaguru, Rajesh & Matanda, Margaret Jekanyika & Verma, Prikshat, 2023. "Information system integration, forecast information quality and market responsiveness: Role of socio-technical congruence," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    6. Gerda Žigienė & Egidijus Rybakovas & Rimgailė Vaitkienė & Vaidas Gaidelys, 2022. "Setting the Grounds for the Transition from Business Analytics to Artificial Intelligence in Solving Supply Chain Risk," Sustainability, MDPI, vol. 14(19), pages 1-23, September.
    7. Lai, Xinfeng & Chen, Zhixiang & Wang, Xin & Chiu, Chun-Hung, 2023. "Risk propagation and mitigation mechanisms of disruption and trade risks for a global production network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    8. Chih-Hung Hsu & An-Yuan Chang & Ting-Yi Zhang & Wei-Da Lin & Wan-Ling Liu, 2021. "Deploying Resilience Enablers to Mitigate Risks in Sustainable Fashion Supply Chains," Sustainability, MDPI, vol. 13(5), pages 1-24, March.
    9. Miguel Afonso Sellitto & Domingos Rafael Ferla Valladares & Erica Pastore & Arianna Alfieri, 2022. "Comparing Competitive Priorities of Slow Fashion and Fast Fashion Operations of Large Retailers in an Emerging Economy," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 1-19, March.
    10. May McMaster & Charlie Nettleton & Christeen Tom & Belanda Xu & Cheng Cao & Ping Qiao, 2020. "Risk Management: Rethinking Fashion Supply Chain Management for Multinational Corporations in Light of the COVID-19 Outbreak," JRFM, MDPI, vol. 13(8), pages 1-16, August.
    11. Wen, Xin & Choi, Tsan-Ming & Chung, Sai-Ho, 2019. "Fashion retail supply chain management: A review of operational models," International Journal of Production Economics, Elsevier, vol. 207(C), pages 34-55.
    12. Elisa Arrigo, 2020. "Global Sourcing in Fast Fashion Retailers: Sourcing Locations and Sustainability Considerations," Sustainability, MDPI, vol. 12(2), pages 1-22, January.
    13. Xujing Zhang & Lichuan Wang & Yan Chen, 2019. "Carbon Emission Reduction of Apparel Material Distribution Based on Multi-Objective Genetic Algorithm (NSGA-II)," Sustainability, MDPI, vol. 11(9), pages 1-15, May.
    14. Bhanuteja Sainathuni & Bradley Guthrie & Pratik J. Parikh & Nan Kong, 2019. "Distribution planning for products with varying life cycles," Flexible Services and Manufacturing Journal, Springer, vol. 31(1), pages 41-74, March.
    15. Choi, Tsan-Ming, 2018. "Launching the right new product among multiple product candidates in fashion: Optimal choice and coordination with risk consideration," International Journal of Production Economics, Elsevier, vol. 202(C), pages 162-171.

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