Robust and resilient strategies for managing supply disruptions in an agribusiness supply chain

Abstract

Agribusiness supply chains involve more sources of uncertainty than typical manufacturing supply chains due to attributes such as long supply lead-times, seasonality, and perishability. Therefore, it is critical but challenging to mitigate risks in agribusiness supply chains. However, the extant literature includes limited quantitative research on robust and resilient strategies for agribusiness supply chain risk management, particularly when perishability is explicitly modeled. In this paper, we investigate the effectiveness of a mixed set of robust and resilient strategies for managing rare high-impact harvest time and yield disruptions. We develop a two-stage stochastic programming model, which integrates an exponential perishability function, to conduct our analysis. The model maximizes the expected profit by selecting optimal risk management strategies and making tactical supply chain planing decisions. The model is applied to a numerical case study of a real-world kiwifruit supply chain. The results suggest that a mixed combination of robust and resilient strategies are most effective for mitigating supply-side disruption risks. Furthermore, as perishability increases, risk management strategies provide a greater relative improvement in the expected profit.