Mitigation strategies against supply disruption risk: a case study at the Ford Motor Company

Supply chains are exposed to different risks, which can be mitigated by various strategies based on the characteristics and needs of companies. In collaboration with Ford, we develop a decision support framework choose best mitigation strategy against supply disruption risk, especially for companies operating small supplier base low inventory levels. Our is multistage stochastic programming model incorporates variety plausible strategies, including reserving backup capacity from primary supplier, secondary holding inventory. We reflect risk into through makers’ input time recover probability. results demonstrate that relying optimal when there no increase expected total cost substantially in presence risk. However, this reduced significantly investing recommended our framework. also show removes burden estimating probability precisely since often loss associated using another neighbourhood estimated values.