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Allocation flexibility for agribusiness supply chains under market demand disruption

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  • G. Behzadi
  • M.J. O’Sullivan
  • T.L. Olsen
  • A. Zhang

Abstract

This paper develops a multi-commodity multi-period optimisation model to analyse market demand disruption risk in agribusiness supply chains. It investigates the role of allocation flexibility and the effectiveness of multiple risk management strategies for achieving allocation flexibility. A robust optimisation formulation is used to obtain risk-averse solutions for an objective combining expected profit and risk. Numerical results are presented for a real-life case study of Zespri’s kiwifruit supply chain. The results show that allocation flexibility is effective for mitigating market demand disruption risk. Three proposed risk management strategies, namely diversified demand market, backup demand market and flexible rerouting, improve both expected profit and risk measures. While diversified demand market and backup demand market strategies are equally important for all decision-makers, flexible rerouting is especially significant for less risk-averse decision-makers.

Suggested Citation

  • G. Behzadi & M.J. O’Sullivan & T.L. Olsen & A. Zhang, 2018. "Allocation flexibility for agribusiness supply chains under market demand disruption," International Journal of Production Research, Taylor & Francis Journals, vol. 56(10), pages 3524-3546, May.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:10:p:3524-3546
    DOI: 10.1080/00207543.2017.1349955
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    Citations

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    Cited by:

    1. Gast, Johannes & Kirkach, Evelina & Ivanov, Dmitry, 2022. "Structured literature review of transport networks and Supply Chain Resilience," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Jahn, Carlos & Blecker, Thorsten & Ringle, Christian M. (ed.), Changing Tides: The New Role of Resilience and Sustainability in Logistics and Supply Chain Management – Innovative Approaches for the Shift to a New , volume 33, pages 469-496, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    2. Dmitry Ivanov, 2022. "Viable supply chain model: integrating agility, resilience and sustainability perspectives—lessons from and thinking beyond the COVID-19 pandemic," Annals of Operations Research, Springer, vol. 319(1), pages 1411-1431, December.
    3. Bo Yan & Xiaoxu Chen & Qin Yuan & Xiaotai Zhou, 2020. "Sustainability in fresh agricultural product supply chain based on radio frequency identification under an emergency," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(4), pages 1343-1361, December.
    4. Soleman Imbiri & Raufdeen Rameezdeen & Nicholas Chileshe & Larissa Statsenko, 2023. "Stakeholder Perspectives on Supply Chain Risks: The Case of Indonesian Palm Oil Industry in West Papua," Sustainability, MDPI, vol. 15(12), pages 1-24, June.
    5. Behzadi, Golnar & O’Sullivan, Michael Justin & Olsen, Tava Lennon, 2020. "On metrics for supply chain resilience," European Journal of Operational Research, Elsevier, vol. 287(1), pages 145-158.
    6. Jiguang Wang & Yushang Hu & Weihua Qu & Liuxin Ma, 2022. "Research on Emergency Supply Chain Collaboration Based on Tripartite Evolutionary Game," Sustainability, MDPI, vol. 14(19), pages 1-25, September.
    7. Xu, Qingyun & He, Yi & Shao, Zhen, 2023. "Retailer's ordering decisions with consumer panic buying under unexpected events," International Journal of Production Economics, Elsevier, vol. 266(C).
    8. Soleman Imbiri & Raufdeen Rameezdeen & Nicholas Chileshe & Larissa Statsenko, 2021. "A Novel Taxonomy for Risks in Agribusiness Supply Chains: A Systematic Literature Review," Sustainability, MDPI, vol. 13(16), pages 1-24, August.
    9. Pratibha Wasan & Ashwani Kumar & Sunil Luthra, 2023. "How can banks and finance companies incorporate value chain factors in their risk management strategy? The case of agro‐food firms," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 858-877, January.
    10. Pritee Ray, 2021. "Agricultural Supply Chain Risk Management Under Price and Demand Uncertainty," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(2), pages 17-32, April.

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