Abstract
With deepening of economic globalization and prevalence of lean production, market competition has intensified and uncertain risk factors in the cross-supply-demand relationship have increased, thus the supply chain has become much more fragile. Force majeure risks such as natural disasters, epidemics, and traffic accidents further expand the scope and losses of supply disruption. In 2019 the outbreak of COVID-19 pandemic has devastated global supply chains and lead to many companies facing the risk of supply disruptions. Based on the comprehensive analysis of relevant research status, this paper investigates the current situation and existing procurement problems of company D under the risk of supply interruption in the COVID-19 pandemic, and analyzes the procurement strategy response in combination with the actual situation of company D. It combines newsvendor model and the capability option model to analyze the ordering decision of company D and enrich the research on the ordering strategy under supply disruption. The purpose of this paper is to provide company D with scientific procurement advice under supply disruption, and provide a reasonable reference for enterprises in the same industry.
Highlights
At the end of 2019, COVID-19 pandemic broke out globally
This article analyzes ordering decisions of company D between its principal suppliers and backup suppliers under the risk of supply disruption caused by COVID-19 pandemic
(4) Both the principal supplier and the backup supplier have affected by COVID-19 pandemic and occur supply disruption
Summary
At the end of 2019, COVID-19 pandemic broke out globally. Many manufacturer companies as the core of supply chains have problems of production delays or even shutdown due to the supply disruption. In COVID-19 pandemic, the more complex the supply network structure is, the greater the possibility of supply disruption can be[2]. At the beginning outbreak of COVID-19, affected by national pandemic prevention and quarantine measures, company D had to drop or even stop in production due to supply disruption. This article analyzes ordering decisions of company D between its principal suppliers and backup suppliers under the risk of supply disruption caused by COVID-19 pandemic. Expected profit function and ordering strategy model based on the newsvendor model and the capacity option model will be established to provide a scientific and reasonable reference for company D and companies in the same industry under the risk of supply disruption caused by uncertain risks and force majeure
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