Title: An analytical methodological framework for the optimal design of resilient supply chains

Authors: Eleftherios Iakovou, Dimitrios Vlachos, Anastasios Xanthopoulos

Addresses: Laboratory of Quantitative Analysis, Logistics and Supply Chain Management, Department of Mechanical Engineering, Division of Industrial Management, Aristotle University of Thessaloniki, P.O. Box 461, Thessaloniki 54124, Greece. ' Laboratory of Quantitative Analysis, Logistics and Supply Chain Management, Department of Mechanical Engineering, Division of Industrial Management, Aristotle University of Thessaloniki, P.O. Box 461, Thessaloniki 54124, Greece. ' Laboratory of Quantitative Analysis, Logistics and Supply Chain Management, Department of Mechanical Engineering, Division of Industrial Management, Aristotle University of Thessaloniki, P.O. Box 461, Thessaloniki 54124, Greece

Abstract: Managing risk and disruptions have emerged as issues of critical importance for today|s globalised supply chains. In this work, we first provide an up-to-date taxonomy of the risks that supply chains are exposed to along with the appropriate solutions that can be employed to improve their resiliency. We then proceed by outlining an analytical methodological framework for supporting the design and operations of efficient supply chains in the new business environment by taking into account the stochasticity of various factors that can lead to disruptions. More specifically, we present a novel, to our knowledge, stochastic single period quantitative model that can assist in the decision-making process regarding the optimal security protection-based configuration of a supply chain both for single and multiple disruption cases. We obtain closed-form solutions in all cases allowing for capturing the optimal trade-off between inventory policies and supply chain protection levels. Finally, we discuss additional useful managerial insights that were obtained.

Keywords: supply chain design; security issues; supply chain protection; stochastic analytical approach; risk management; supply chain resilience; supply chain disruptions; supply chain management; SCM; risks taxonomy; inventory policies.

DOI: 10.1504/IJLEG.2007.014498

International Journal of Logistics Economics and Globalisation, 2007 Vol.1 No.1, pp.1 - 20

Published online: 11 Jul 2007 *

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