HMS 2014 Proceeding

Conceptual model of supply chain node for simulation based risk analysis

Authors:   Peter Mensah, Yuri Merkuryev, Jelena Pecherska

Abstract

The Supply Chain comprising of distribution centres, plants, terminals and stores in the product flow, and Information and Communication Technologies platforms in the information flow face a lot of risks in today‚??s competitive world. As SCs are highly complex dynamic multi-state systems, such systems as well as their individual nodes are exposed to numerous random factors in the form of various risks, which include natural disasters, terrorism, cyber attacks, credit crunch, and what is more is the impact of demand risk due to optimistic forecasts that turn out to be a disaster due to organizations‚?? ineffective and inefficient information flow. These risks could yield to a drastic loss in productivity, revenue, competitive advantage, profitability etc, if not managed appropriately. This article discusses the risks typical to the supply chain as well as the conceptualization of risks for subsequent simulation-based analysis. In addition, the development of a generic conceptual model of a retail node is described and relevant performance measure indicators are introduced.

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