Take Action

Home | Faculty & Research Overview | Research

Research Details

Importance of Decoupling Disruption and Recurrent Risk in a Supply Chain, Naval Research Logistics Quarterly

Abstract

This paper focuses on the importance of decoupling recurrent supply risk and disruption risk when planning appropriate mitigation strategies. We show that bundling the two uncertainties leads a manager to underutilize a reliable source while over utilizing a cheaper but less reliable supplier. As in Dada et al. (working paper, University of Illinois, Champaign, IL, 2003), we show that increasing quantity from a cheaper but less reliable source is an effective risk mitigation strategy if most of the supply risk growth comes from an increase in recurrent uncertainty. In contrast, we show that a firm should order more from a reliable source and less from a cheaper but less reliable source if most of the supply risk growth comes from an increase in disruption probability.

Type

Article

Author(s)

Sunil Chopra, Gilles Reinhardt, Usha Mohan

Date Published

2007

Citations

Chopra, Sunil, Gilles Reinhardt, and Usha Mohan. 2007. Importance of Decoupling Disruption and Recurrent Risk in a Supply Chain. Naval Research Logistics Quarterly . 54(5): 544-555.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action