A model to evaluate risk propagation considering effect of dynamic risk information sharing and multi-sourcing in supply chain networks

The cost-optimal trend in global competitive environment has led to lean, complex and consequently vulnerable supply chains. This vulnerability is high due to the presence of increasing dependency in lean supply chain networks. Hence, it is essential for companies to regulate the supply chain network structure and information sharing strategies so as to be more resilient to disruptions/risks. In order to achieve this objective, it is imminent to analyze as to how best to quantify and examine the robustness of their supply chain networks under disruptions. Here, we propose an analytical model to assist companies to evaluate dynamic risk propagation and quantify likely disruption loss in supply chain networks with the consideration of the effect of multiple sourcing and information sharing on risk propagation. Mean loss and Value at risk (VaR) is employed to quantify the potential loss due to disruptions.