Impact of risk attitudes on the concurrent design of supply chains and product architectures

Abstract

Risk attitudes may drive the design decision-making process and lead to different solutions. A goal programming model is presented for concurrently designing the supply chain and product architecture. The model analyzes the impacts of the risk attitude on product architecture and supply chain design. Three risk perspectives are studied. Risk-seeking attitude prioritizes cost minimization, risk-averse attitude prioritizes risk exposure minimization, and risk-neutral attitude prioritizes both objectives. A case study is presented to demonstrate the applicability of the model. Research findings highlight the importance of considering the decision maker’s risk attitude in the concurrent design of products and their supply chains.