Supply chain resilience under a performance-based contract

Araceli Zavala, David Nowicki, Jose E. Ramirez-Marquez

    Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

    Abstract

    Supply chain managers are looking for more cost-effective ways to satisfy demand. However, unexpected events put at risk their profit margins and even more if suppliers are immersed in a performance-based contract (PBC). Under a PBC, the supplier's profit is linked to outcomes and performance instead of solely providing products. To improve a supplier's performance, increasing resilience has shown benefits to mitigate the effects of disruptive events. Thus, this research focuses on understanding the vulnerability of two highly interrelated systems, a primary system (PS) and its corresponding support infrastructure (SI) necessary to sustain the proper operation of the PS, such as those found in the aerospace, defense, utilities, and construction industries. The model demonstrates not only the post-disruption resilience at each support infrastructure node along with the investment necessary to restore the network but also an adequate design for the PS using the redundancy allocation problem. The objective is to maximize the supplier's profit under contractual constraints when facing disruptive events.

    Original languageEnglish
    Title of host publicationProceedings of the 30th European Safety and Reliability Conference and the 15th Probabilistic Safety Assessment and Management Conference
    EditorsPiero Baraldi, Francesco Di Maio, Enrico Zio
    Pages3741
    Number of pages1
    DOIs
    StatePublished - 2020
    Event30th European Safety and Reliability Conference, ESREL 2020 and 15th Probabilistic Safety Assessment and Management Conference, PSAM15 2020 - Venice, Italy
    Duration: 1 Nov 20205 Nov 2020

    Publication series

    NameProceedings of the 30th European Safety and Reliability Conference and the 15th Probabilistic Safety Assessment and Management Conference

    Conference

    Conference30th European Safety and Reliability Conference, ESREL 2020 and 15th Probabilistic Safety Assessment and Management Conference, PSAM15 2020
    Country/TerritoryItaly
    CityVenice
    Period1/11/205/11/20

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