Developing a Supply Chain Stress Test

Lan Luo () and Charles L. Munson ()
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Lan Luo: University of Hartford
Charles L. Munson: Washington State University

A chapter in Supply Chain Risk Mitigation, 2022, pp 61-80 from Springer

Abstract: Abstract Borrowing a concept from the financial sector, we propose an approach to developing a “stress test” to determine the ability of a given supply chain to deal with crises under extreme, but plausible, scenarios. Managers can use such a tool to assess the risk impacts of their respective supply chains. Using predictive global sensitivity analysis, we develop a single predictive structural equation that managers can use to estimate the percentage loss given a disruption scenario. Based on the estimation, managers can further categorize their current supply chains into five risk levels. The single structural equation allows managers to re-evaluate the chain promptly as conditions change. Managerial insights are observed from the proposed equation that can help mitigate the risk of a supply chain.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-031-09183-4_3

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DOI: 10.1007/978-3-031-09183-4_3

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