Supply Chain Recovery Capacity Investment Decision and Coordination under Supply Disruption
Zhu Chuan-bo
Chen Chou-yong
Bao Xing
Abstract：To mitigate the risk of supply disruption to the manufacturers resulting from the supplier's pro-duction interruption , the manufacturer needs to optimize the level of supply chain recovery capacity invest-ment prior to a disruption .Conditional Value-at-Risk ( CVaR ) is introduced to characterize the supply chain's operation goal under disruption .A decision-making model of supply chain recovery capacity invest-ment under certain confidence control level is established .Furthermore , the degree of the manufacture's risk aversion on the optimal level of supply chain recovery capacity investment is investigated .In a decen-tralized supply chain , the manufacturer uses the Performance-Based Contract to encourage suppliers to in-vest right recovery capacity in order to coordinate a supply chain .The results show that the CVaR criteria can describe the behavior of supply chain recovery capacity investment , the higher the degree of the manufacture's risk aversion , the more the optimal supply chain recovery capacity is .The supply chain is coordinated when the conditional expected value of penalty coefficient of unit outage time is equal to the conditional expected value of goodwill cost of unit outage time .
Keywords：supply disruptioncapacity recoverydisruption managementsupply chain coordinationconditional value-at-risk(CVaR)
Publication Date：2014-01-01
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：6( 27-32 )