Cost sharing in the prevention of supply chain disruption
type: Item
instance of: scholarly article
title: Cost sharing in the prevention of supply chain disruption
zbMATH Open document ID: 1426.90111
DOI: 10.1155/2017/7843465
author: W. Wang
author: Kelei Xue
author: X. Sun
published in: Mathematical Problems in Engineering
publication date: 2018-11-05T00:00:00Z
review text: Summary: We examine the influence of cost-sharing mechanism on the disruption prevention investment in a supply chain with unreliable suppliers. When a supply chain faces considerable loss following a disruption, supply chain members are motivated toward investing in manners that reduce their disruption probability. In improving supply chain reliability, the cost-sharing mechanism must be set appropriately to realize the efficiency of the disruption prevention investment. In a supply chain where the focal manufacturing company has its own subsidiary supplier and an outsourcing supplier, we analyze different forms of cost-sharing mechanisms when both suppliers confront disruption risks. Through the cost-sharing mechanisms presented in this study, supply chain members can improve their reliability via disruption prevention investments without considerably increasing the total supply chain cost. We present two concepts, the cost-sharing structure and the cost-sharing ratio, in this study. As the two key components of cost-sharing mechanism, these two elements constitute a practicable cost allocation mechanism to facilitate disruption prevention.
Mathematics Subject Classification ID: 90B30
Mathematics Subject Classification ID: 90B05
zbMATH DE Number: 6972494
MaRDI profile type: Publication
full work available at URL: https://doi.org/10.1155/2017/7843465
OpenAlex ID: W2728686280
Wikidata QID: Q59147782
cites work: Supply Disruptions, Asymmetric Information, and a Backup Production Option
cites work: On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks
cites work: Disruption-management strategies for short life-cycle products
description: scientific article; zbMATH DE number 6972494