A supply chain risk evaluation method based on fuzzy TOPSIS

Abstract

A supply chain is a value-added chain and supply chain management (SCM) benefits enterprises through opti mizing their internal business processes, lowering logistics costs, improving customer satisfaction, and more. While enhancing competitive ability and evading the risks of traditional management methods, SCM also carries its own risks. Initially, this paper studies major risk factors of the supply chain by analyzing its operating mechanism, essential characteristics, and results of previous research. Later, based on these risk factors, a supply chain risk evaluation index is presented based on the principle of comprehensive, rational, and systematic thinking. Finally, a method for evaluating supply chain risk is proposed based on Fuzzy TOPSIS (Fuzzy Technique for Order Preference by Similarity to an Ideal Solution – F-TOPSIS), and its validity is demonstrated in a case study. The research contribution of this paper can boost the practical application and theoretical development of supply chain risk management.