A stochastic model for risk management in global supply chain networks

Abstract

With the increasing emphasis on supply chain vulnerabilities, effective mathematical tools for analyzing and understanding appropriate supply chain risk management are now attracting much attention. This paper presents a stochastic model of the multi-stage global supply chain network problem, incorporating a set of related risks, namely, supply, demand, exchange, and disruption. We provide a new solution methodology using the Moreau-Yosida regularization, and design an algorithm for treating the multi-stage global supply chain network problem with profit maximization and risk minimization objectives. © 2006 Elsevier B.V. All rights reserved.