Modelling of risk transmission and control strategy in the transnational supply chain

Abstract

With the process of economic globalisation, especially the Belt and Road Initiative implemented by China, the transnational supply chain is dramatically increasing, and the risk ripple effect is becoming increasingly important. Understanding and predicting the dynamic trend of risk transmission within the transnational supply chain is important to prevent the spread of risks. However, the current research lacks the dynamic interpretation of risk transmission and control in the transnational supply chain and ignores the impact of differences among suppliers and the network structure. Therefore, this paper proposed an improved susceptible-infectious-susceptible (SIS) model combined with a complex network model and an optimised approach to the selection of risk control strategies to explore three issues: first, the dynamic change and trend of risk transmission; second, the relationships and impacts of different suppliers and structure of the supply chain on risk transmission; and third, the selection of a risk control strategy within the transnational supply chain. A numerical analysis and an example of a risk control strategy selection are conducted to reveal four properties of risk transmission within the transnational supply chain. In addition, the model is verified with a simulation of a real-world scenario based on the 2011 Japanese earthquake and tsunami.