Measuring the supply chain risk and vulnerability in frequency space

Global supply chains are exposed to different kinds of risks that increase along with increasing globalisation. There appears to be a cost associated with the event that certain goods are not at the required location (location of activity cell of a global supply chain), at the required time, and of the required quality and quantity. It is suggested that the costs of risk in a supply chain, which is exposed to internal and external risk are measured using net present value of activities approach. This is how the vulnerability of a supply chain is predicted. The model of risk measurement is based on the previous work of Input-Output Analysis and Laplace transforms of the supply chain model developed by Grubbstrom and his Linkoping School (IPE), based on the ideas of MRP-DRP stochastic modelling, presented in the paper by Bogataj and Bogataj [Bogataj, M., Bogataj, L., 2004. On the compact presentation of the lead times perturbations in distribution networks. International journal of production economics 88-92, 145-155] which describes the compact presentation of the lead-time perturbations in production-distribution networks. Parametric linear programming approach is suggested to achieve numerical results. (C) 2007 Elsevier B.V. All rights reserved.