Foundations and Trends® in Technology, Information and Operations Management > Vol 14 > Issue 1–2

Managing Disruption Risk Over the Product Life Cycle

Vadim Glinsky, Kellogg School of Management, Northwestern University, USA, vadim.glinskiy@kellogg.northwestern.edu , Sunil Chopra, Kellogg School of Management, Northwestern University, USA, s-chopra@kellogg.northwestern.edu , Florian Lücker, Cass Business School, City, University of London, UK, florian.lucker@city.ac.uk
 
Suggested Citation
Vadim Glinsky, Sunil Chopra and Florian Lücker (2020), "Managing Disruption Risk Over the Product Life Cycle", Foundations and Trends® in Technology, Information and Operations Management: Vol. 14: No. 1–2, pp 101-120. http://dx.doi.org/10.1561/0200000096-6

Publication Date: 01 Oct 2020
© 2020 Vadim Glinsky, Sunil Chopra and Florian Lücker
 
Subjects
Supply chain management,  Capacity Planning,  Marketing/Manufacturing Interfaces
 

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In this article:
1. Motivation and Problem Description
2. Demand Evolution Over the Life Cycle
3. Model Formulation and Insights
4. Future Research
References

Abstract

In this article, we focus on managing disruption risk over the life cycle of a product. We consider two disruption mitigation strategies: holding risk mitigation inventory (RMI) and ordering from a reliable supplier. Our goal is to determine how the two strategies can best be used over the life cycle of a product where future demand is influenced by current sales that may be affected by supply disruptions. Our insights based on numerical analysis indicate that the optimal actions are impacted by the fact that future demand is affected by current sales over the life cycle. This results in optimal behavior that may be quite different from what has been proposed in the literature where demand over time has largely been assumed to be independent of current sales. For example, we show that the order quantity from an unreliable supplier may increase in the probability of disruption.

DOI:10.1561/0200000096-6
ISBN: 978-1-68083-722-3
248 pp. $99.00
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ISBN: 978-1-68083-723-0
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Table of contents:
Advances in Supply Chain Finance and FinTech Innovations Book Overview
Part 1: Financing Issues in Supply Chains
Trade Credit in Supply Chains: Multiple Creditors and Priority Rules
Guarantor Financing Selection Under Influence of Supply Chain Leadership and Economies of Scale
Inventory and Financial Strategies with Capital Constraints and Limited Joint Liability
Part 2: FinTech Innovations for Supply Chains
Financing Inventory Through Initial Coin Offerings (ICOs)
Renewable Identification Numbers: A Supply-Chain Risk View
Part 3: Advances in Risk Management of Operational Systems
Managing Disruption Risk Over the Product Life Cycle
Production Planning with Inventory-Based Financing
Achieving Efficiency in Capacity Procurement
The Term Structure of Optimal Operations
Least Squares Monte Carlo and Approximate Linear Programming with an Energy Real Option Application

Emerging Advances in Supply Chain Finance and FinTech Innovations

Advances in Supply Chain Finance and FinTech Innovations examines three themes:

Financing Issues in Supply Chains look into popular working capital management financing practices: trade credits and guarantor practices including advanced trade credit practices in supply chains, guarantor financing practices for capital constrained retailers, and innovative practices of joint financing of capital constrained firms by a bank.

FinTech Innovations for Supply Chains examines business model innovations for supply chain financing supported through new platform technologies (such as blockchain), and simple financial technologies effectively implemented for high impact in supply chain risk management.

Advances in Risk Management of Operational Systems provide state-of-the art thinking on many risk issues in supply chain operations including disruption strategies over the product life cycle, the production planning complexities for a capital constrained manufacturer that uses Inventory Based Financing (IBF) scheme to fund its working capital needs, capacity procurement decision, capacity planning in the presence of demand and price uncertainty, and valuing complex real options in dynamic operational settings.

 
TOM-096-6

Companion

Foundations and Trends® in Technology, Information and Operations Management, Volume 14, Issue 1-2 Special Issue: Advances in Supply Chain Finance and FinTech Innovations
See the other articles that are also part of this special issue.