Integrated supply chain risk management via operational methods and financial instruments

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dc.contributor.author Bandaly, Dia
dc.contributor.author Satir, Ahmet
dc.contributor.author Shanker, Latha
dc.date.accessioned 2017-11-01T10:39:27Z
dc.date.available 2017-11-01T10:39:27Z
dc.date.copyright 2012 en_US
dc.date.issued 2017-11-01
dc.identifier.issn 1366-588X en_US
dc.identifier.uri http://hdl.handle.net/10725/6458 en_US
dc.description.abstract Supply chain risk management (SCRM) is an emerging field that generally lacks integrative approaches across different disciplines. This study contributes to narrowing this gap by developing an integrated approach to SCRM using operational methods and financial instruments. We study a supply chain composed of an aluminium can supplier, a brewery and a distributor. The supply chain is exposed to aluminium price fluctuation and beer demand uncertainty. A stochastic optimisation model is developed for managing operational and financial risks along the supply chain. Using this model as a base, we compare the performance of an integrated risk management model (under which operational and financial risk management decisions are made simultaneously) to a sequential model (under which the financial risk management decisions are made after the operational risk management decisions are finalised). Through simulation-based optimisation and using experimental designs and statistical analyses, we analyse the performance of the two models in minimising the expected total opportunity cost of the supply chain. We examine the supply chain performance as a function of three factors, each at three levels: risk aversion, demand variability and aluminium price volatility. We find that the integrated model outperforms the sequential model in most but not in all cases. Furthermore, while the results indicate that the supply chain improves its performance by being less risk averse, there exists a threshold beyond which accepting a higher risk level is not justified. Managerial insights are provided for various business scenarios experimented with. en_US
dc.language.iso en en_US
dc.title Integrated supply chain risk management via operational methods and financial instruments en_US
dc.type Article en_US
dc.description.version Published en_US
dc.author.school SOB en_US
dc.author.idnumber 201306324 en_US
dc.author.department Department of Information Technology and Operations Management (ITOM) en_US
dc.description.embargo N/A en_US
dc.relation.journal International Journal of Production Research en_US
dc.journal.volume 52 en_US
dc.journal.issue 7 en_US
dc.article.pages 2007-2025 en_US
dc.keywords Risk management en_US
dc.keywords Supply chain en_US
dc.keywords Finance en_US
dc.keywords Inventory en_US
dc.keywords Integrated methods en_US
dc.keywords Optimisation via simulation en_US
dc.identifier.doi http://dx.doi.org/10.1080/00207543.2013.844376 en_US
dc.identifier.ctation Bandaly, D., Satir, A., & Shanker, L. (2014). Integrated supply chain risk management via operational methods and financial instruments. International Journal of Production Research, 52(7), 2007-2025. en_US
dc.author.email dia.bandaly@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url http://www.tandfonline.com/doi/abs/10.1080/00207543.2013.844376 en_US
dc.author.affiliation Lebanese American University en_US

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