Managing Risks of Supply-Chain Disruptions: Dual ... - CiteSeerX

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normal or in disruption.The program builds 6 “value matrices” (OneNormal, TwoNormal, ThreeNormal, OneDisruption,TwoDisruption, ThreeDisruption) that represent the values of the 6 possible states of the firmaccording to the uncertain state (m,k,j).Actually there is a redundancy, as the disruption is represented both in the uncertain state (m,k,j)(the duration of disruption is given at the beginning and knowing the time of last disruption permitsto determine the current state of the main supplier – normal or disruption) and in the firm state. Itwould have been better to consider only three states for the firm representing the different sourcingstrategies (One, Two and Three)We dealt separately with the particular case (m,k,0). The program builds 6 additional “valuematrices” (InitialOneNormal, InitialTwoNormal, InitialThreeNormal, InitialOneDisruption,InitialTwoDisruption, InitialThreeDisruption).The value calculation of each element of the matrixes is done thanks to the function Value (orInitialValue for the particular case (m,k,0)).The function main reproduces the backward algorithm and calculates all the elements of the “valuematrices” starting from the last period until t=0.The function loop allows one to run the function main for different values of the parameters.Also, the function GenNormalProba defines the probabilities of evolution when the situation isnormal and GenDisruptionProba when the situation is in disruption. The function Constantsdefines the values of the different parameters.A small tip to finish. In order to fix the decision process we just need to put the different variablesIMainSupplier− > DualSourcing, ILocalSupplier− > DualSourcing, IMainSupplier > LocalSuppliervery high level.I>−andLocalSupplier− MainSupplierat a86
2) Code------------------------------------------------------------------------------------------------------------------------------------------------------------- GENERAL LOOP ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Author: Sophie PochardWritten on March 28th 2003----------------------------------------------------------------------------------------------------------------------------------% Program to build the Figure 6.1.clear CONSTANTS;CONSTANTS=constant;CONSTANTS.OnetoTwo=1000000000;CONSTANTS.OnetoThree=1000000000;CONSTANTS.TwotoOne=1000000000;CONSTANTS.TwotoThree=1000000000;CONSTANTS.ThreetoOne=1000000000;CONSTANTS.ThreetoTwo=1000000000;for i=1:1:10ix(i)=0+0.1*iCONSTANTS.lambda=x(i)Opt=Main(CONSTANTS);ValeurOneSupplier(i)=Opt.InitValueOneNormal(1,1)ValeurTwoSuppliers(i)=Opt.InitValueTwoNormal(1,1)ValeurThreeSuppliers(i)=Opt.InitValueThreeNormal(1,1)endfigure(3)hold onplot(x,ValeurOneSupplier)hold onplot(x,ValeurTwoSuppliers)hold onplot(x,ValeurThreeSuppliers)xlabel('Probability of Rare Events');ylabel('Value');87
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Managing Risks of Supply-Chain Disr
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AcknowledgementsI would like to exp
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4.2.5 Conclusions .................
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List of FiguresFigure 1.1: Strategy
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Chapter 1Introduction.Modern supply
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- Levels 2 and 3--between these two
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5. In terms of implementation, Forr
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Some articles focus precisely on di
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2.3 Secure the Supply-ChainThere ar
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1) Firms need to build a resilient
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at ports and airports and along the
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2.6 Conclusions- Increase the secur
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The most adapted approach (single V
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suppliers’. The main objective of
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Some people continue to think that
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For example, there is no market for
Page 35 and 36: 4.1.3 Option ValueJust like a finan
Page 37 and 38: - I0: initial investmentThe problem
Page 39 and 40: Re plicating portfolio in the up st
Page 41 and 42: Let’s consider a portfolio compri
Page 43 and 44: The differential equation is quite
Page 45 and 46: value of the cash flows of the proj
Page 47 and 48: update their option management stra
Page 49 and 50: Chapter 5OptionModeling Dual-Sourci
Page 52 and 53: We will describe the firm’s curre
Page 54 and 55: investment costs are denotedIMainSu
Page 56 and 57: 5.4 Programming on MatlabTo solve t
Page 58 and 59: Chapter 6Results of the ModelThis c
Page 60 and 61: uses the main supplier its profits
Page 62 and 63: drivers - in particular at the time
Page 64 and 65: what will happen. To hedge this dem
Page 66 and 67: 6.5 Conclusions- Real options allow
Page 68 and 69: market share from its competitor.7.
Page 70 and 71: = 0.99 * ($100) + 0.01* (-$200)= $9
Page 72 and 73: Table 7.1: Assumption on Parameter
Page 74 and 75: 7.2.4 Exploit at maximum real optio
Page 76 and 77: developed “ a general simulation
Page 78 and 79: (13) Lee, H.L., Wolfe, M. (2003),
Page 80 and 81: and Supply Management Course.(38) Z
Page 82 and 83: to reserve for the future, by maxim
Page 84 and 85: APPENDIX B: PARAMETER VALUES USED T
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Page 92 and 93: % Probability of going from (m,k,j)
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Page 98 and 99: elsevalue.DecOneNormal=3;end-------
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