Supply chain disruption assessment based on the newsvendor model

Abstract

Purpose: This paper focuses on supply chain disruption assessment.

Design/methodology/approach: Newsvendor Model

Findings: As both cost and income principle will be taken into account in supply chain disruption assessment, we proposed in this paper: (1) the problem of supply chain disruption assessment is the trade-off problem. (2) the generic single period - newsvendor model can be used for capturing the critical point, which in tradition model stands for the demarcation point of profit but in this paper is the least costs considering disruption costs and expected revenues.

Research limitations/implications: single period - newsvendor model

Practical implications: we give an example for test the effectiveness of this method

Originality/value: to research supply chain risk in a new approach, that is: supply chain risk has both cost and profit. So we can assess it with trade-off method