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Identification of Critical Nodes and Links in a Supply Chain by Robust Optimization

Authors:
Tim vor der Brück
René Meier

Keywords: supply chain management; critical nodes; critical links; robust optimization; supply chain risks

Abstract:
The impact of a supplier or transportation link breakdown in a supply chain can strongly differ depending on which nodes/links are affected. While the breakdown of producers of rarely needed products or backup suppliers might result in no or only minor repercussions, the breakdown of central suppliers or transportation links, also called critical nodes/links, can be fatal and may cause a severe delivery delay or even a complete production failure of certain product lines. Therefore, it is of high importance for a company to identify its critical nodes/links in the supply chain and take precautionary actions such as organizing additional backup suppliers or alternative ways of transportation. In this paper, we describe a novel method to identify critical nodes and links in a supply chain based on robust optimization, which has the advantage that supply chain risks are considered, and also precise risk cost estimates regarding the possible breakdown of each supplier node are provided. Finally, we demonstrate this method on an example supply chain and discuss its distribution of critical nodes and links.

Pages: 22 to 26

Copyright: Copyright (c) IARIA, 2022

Publication date: November 13, 2022

Published in: conference

ISSN: 2308-4499

ISBN: 978-1-61208-990-4

Location: Valencia, Spain

Dates: from November 13, 2022 to November 17, 2022