Risk Propagation Decision-Making for Product and Supply Chain Change Systems Under COVID-19: An Assessment-to-Control Support Scheme

Abstract

Dynamics in supply chains (SCs) can trigger risks due to the changing and propagating nature. In the context of COVID-19, this article presents an assessment-to-control decision-making support scheme to tackle propagation effect uncertainties of SCs considering product changes. First, a new decision model is proposed for risk warnings, with the potential advantages that: 1) propagation effects can be assessed generally and objectively and 2) permitting control theory to integrate and identify the interrelations between propagation effects. More specifically, the bullwhip effect (BE) with operational and behavioral causes is quantified as cascading amplified inventory fluctuations. The ripple effect (RE) from large-scale supplier disruptions driven by COVID-19 is quantified as increased entropy rates (ERs). Then, the system studied is integrated as a closed-loop control system under provided change control. Moreover, some criteria are derived for the existence of controller gains/decision coefficients to stabilize the closed-loop system with the BE mitigation under the RE. Finally, a mask SC case study under COVID-19 is performed for examining the effectiveness of the proposed scheme.