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Article
Modeling a severe supply chain disruption and post-disaster decision making with application to the Japanese earthquake and tsunami
IIE Transactions
(2014)
Abstract
Modern supply chains are increasingly vulnerable to disruptions, and a disruption in one part of the world can cause supply difficulties for companies around the globe. This article develops a model of severe supply chain disruptions in which several suppliers suffer from disabled production facilities and firms that purchase goods from those suppliers may consequently suffer a supply shortage. Suppliers and firms can choose disruption management strategies to maintain operations. A supplier with a disabled facility may choose to move production to an alternate facility, and a firm encountering a supply shortage may be able to use inventory or buy supplies from an alternate supplier. The suppliers and firms optimal decisions are expressed in terms of model parameters such as the cost of each strategy, the chances of losing business, and the probability of facilities reopening. The model is applied to a simulation based on the 2011 Japanese earthquake and tsunami, which closed several facilities of key suppliers in the automobile industry and caused supply difficulties for both Japanese and U.S. automakers.
Keywords
- automobile industry,
- disruption management,
- Japanese earthquake and tsunami,
- simulation,
- supply chain risk
Disciplines
Publication Date
2014
Publisher Statement
This is an Accepted Manuscript of an article published by Taylor & Francis in IIE Transactions on 2014, available online: http://www.tandfonline.com/doi/pdf/10.1080/0740817X.2013.876241.
Citation Information
Cameron A. MacKenzie, Kash Barker and Joost R. Santos. "Modeling a severe supply chain disruption and post-disaster decision making with application to the Japanese earthquake and tsunami" IIE Transactions Vol. 46 Iss. 12 (2014) Available at: http://works.bepress.com/cameron_mackenzie/2/