Prioritizing Key Supply Chain Risks Using the Risk Assessment Matrix and Shannon Fuzzy Entropy — with a Case Study in the Home Appliance Industry

Abstract

The aim of this study is to present an approach for identifying and prioritizing risk factors of supply chain in the home appliance industry. First, the indexes related to the supply chain risk have been determined by literature review; and then the indexes have been refined by consulting experts; finally, the six main indexes including supplier, manufacturer, customer, environment, distributor and information as well as 32 subsidiary indexes for supply chain risks have been selected. In order to assess the indexes, a fuzzy questionnaire has been developed and distributed to 15 managers and employees of Snowa as one of the Entekhab Industrial Group corporate brands, the main home appliance manufacturing company in Iran. Research population included managers and experts of the company and the analysis approaches included risk-assessment matrix and Shannon fuzzy entropy. Findings indicated that environment, manufacturer and supplier indexes with the weights of 0.105, 0.102 and 0.095, respectively were prioritized as the top three risk factors in product development. Furthermore, the subsidiary indexes of raw material alteration, delay in supply of the demand, work force, after-sale services, competitors and lack of political stability were among the top risk factors of new product development.