IDEAS home Printed from https://ideas.repec.org/p/jmp/jm2018/psa1077.html
   My bibliography  Save this paper

Selection of a dynamic supply portfolio under delay and disruption risks

Author

Listed:
  • Tadeusz Sawik

Abstract

The problem of a multi-period supplier selection and order quantity allocation in the presence of supply chain disruption and delay risks is considered. Given a set of customer orders for finished products, the decision-maker needs to decide from which supplier and when to deliver product-specific parts required for each customer order to meet customer requested due date at a low cost or a high service level and to mitigate the impact of supply chain risks. For the selection of risk-neutral or risk-averse dynamic supply portfolio, a scenario-based stochastic mixed integer programming approach is developed. In the scenario analysis, the low probability and high impact supply disruptions are combined with the high probability and low impact supply delays. The risk-neutral portfolio is optimised by minimising expected cost or maximising expected service level. The risk-averse portfolio is optimised by calculating cost- or service-at-risk and minimising conditional cost-at risk or maximising conditional service at risk. The proposed dynamic portfolio approach leads to a time-indexed stochastic MIP formulation with a strong LP relaxation, which has proven to be computationally very efficient. The findings indicate that neglecting potential delay risks in supplier selection may lead to greater supply fluctuations and manufacturing delays.

Suggested Citation

  • Tadeusz Sawik, 2018. "Selection of a dynamic supply portfolio under delay and disruption risks," 2018 Papers psa1077, Job Market Papers.
  • Handle: RePEc:jmp:jm2018:psa1077
    as

    Download full text from publisher

    File URL: https://ideas.repec.org/jmp/2018/psa1077.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Park, YoungWon & Hong, Paul & Roh, James Jungbae, 2013. "Supply chain lessons from the catastrophic natural disaster in Japan," Business Horizons, Elsevier, vol. 56(1), pages 75-85.
    2. W.C. Tsai, 2016. "A dynamic sourcing strategy considering supply disruption risks," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2170-2184, April.
    3. Sawik, Tadeusz, 2010. "Single vs. multiple objective supplier selection in a make to order environment," Omega, Elsevier, vol. 38(3-4), pages 203-212, June.
    4. Faiza Hamdi & Ahmed Ghorbel & Faouzi Masmoudi & Lionel Dupont, 2018. "Optimization of a supply portfolio in the context of supply chain risk management: literature review," Journal of Intelligent Manufacturing, Springer, vol. 29(4), pages 763-788, April.
    5. Tadeusz Sawik, 2017. "A portfolio approach to supply chain disruption management," International Journal of Production Research, Taylor & Francis Journals, vol. 55(7), pages 1970-1991, April.
    6. Tadeusz Sawik, 2016. "On the risk-averse optimization of service level in a supply chain under disruption risks," International Journal of Production Research, Taylor & Francis Journals, vol. 54(1), pages 98-113, January.
    7. Sawik, Tadeusz, 2011. "Selection of supply portfolio under disruption risks," Omega, Elsevier, vol. 39(2), pages 194-208, April.
    8. Hammami, Ramzi & Temponi, Cecilia & Frein, Yannick, 2014. "A scenario-based stochastic model for supplier selection in global context with multiple buyers, currency fluctuation uncertainties, and price discounts," European Journal of Operational Research, Elsevier, vol. 233(1), pages 159-170.
    9. Sawik, Tadeusz, 2016. "Integrated supply, production and distribution scheduling under disruption risks," Omega, Elsevier, vol. 62(C), pages 131-144.
    10. Mahmut Parlar & David Perry, 1996. "Inventory models of future supply uncertainty with single and multiple suppliers," Naval Research Logistics (NRL), John Wiley & Sons, vol. 43(2), pages 191-210, March.
    11. Fattahi, Mohammad & Govindan, Kannan & Keyvanshokooh, Esmaeil, 2017. "Responsive and resilient supply chain network design under operational and disruption risks with delivery lead-time sensitive customers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 176-200.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jmp:jm2018:psa1077. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann). General contact details of provider: https://ideas.repec.org/jmp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.