The analysis of logistics outsourcing risk: A system dynamics approach

Logistics outsourcing risk is emerging as a key challenge to logistics management in supply chain. The risk analysis is a critical first step in managing logistics outsourcing risk. The main purpose of this paper is to study the risk associated with logistics outsourcing using system dynamics theory. Firstly, we analyze the logistics outsourcing risk from the system thinking perspective. Secondly, based on the analysis of logistics outsourcing risk system´s structure, inner mechanisms and relationships, a system dynamic model including input subsystem, risk subsystem, performance subsystem and benefit subsystem is built. Finally a detailed description of the model is presented from the viewpoint of system theory.