Disentangling diversification in supply chain networks

Kamil J. Mizgier, Stephan M. Wagner and Matthias Jüttner

International Journal of Production Economics, 2015, vol. 162, issue C, 115-124

Abstract: We propose a model for the quantification of business disruption risk in a global supply chain network. To calculate the loss distribution induced by supply chain disruptions for a focal firm, we apply a bottom-up modeling approach. On the firm level, we model production disruptions of various hazard events in reduced form. We incorporate the network structure explicitly and define the loss propagation between the firms. Via Monte Carlo simulation, we analyze the effects of different model specifications and network structures on the loss distribution of the focal firm. We show that diversification effects can lead to counterintuitive results when we consider the network structure and the correlations of hazard events. Our methodology and findings enable more informed and transparent decisions for supply chain design.

Keywords: Supply chain risk management; Network theory; Disruption management; Reduced form model (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527315000109
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:162:y:2015:i:c:p:115-124

DOI: 10.1016/j.ijpe.2015.01.007

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().