Demand-side Risk Research Articles

A hesitant approach to sustainable supply chain risk assessment

Supply chains (SCs) are increasingly vulnerable to disruptive events, posing risks to all involved parties. Managing and mitigating these risks is crucial for resilient and sustainable SC, aligned with global sustainability goals. This study proposes a new hesitant approach to classical fuzzy cognitive mapping (FCM) to examine the underlying structure of sustainable supply chain risks (SCRs) and their long-term impact on SC performance. By handling the uncertainty caused by human doubt, the proposed approach captures both interpersonal and intrapersonal hesitancy in complex SC systems with negative and positive causalities. The applicability of the proposed approach is demonstrated through an application for a generic SC. The findings reveal that risk events linked to the economic, social, and environmental dimensions of sustainability have a negative impact on SC performance. Supplier-related risks are identified as the most critical risks in sustainable SC systems, followed by operational risks and demand-side risks. The proposed approach enhances risk assessment accuracy and robustness, providing SC managers with reliable insights for effective risk mitigation strategies, and offering valuable guidance in managing SCRs in a sustainable manner. It highlights the significance of a holistic approach to supply chain management (SCM) by identifying critical concepts related to sustainable SCRs.

Credit constraint and agricultural technology adoptions: evidence from Ethiopia

PurposeThis paper investigates constraints to yield enhancing technology adoptions, highlighting credit using data pooled from the first three waves of the Ethiopian socio-economic surveys.Design/methodology/approachDirect elicitation methodology is used to identify household's non-price credit rationing status. The panel selection model specified to examine causal effects of credit constraint on adoption variables allows us to tackle self-selection into adoptions and potential endogeneity of credit constraint while controlling for unobserved heterogeneity in both the selection and main equations.FindingsResults show that about 54% of sample households face credit rationing, predominantly demand-side risk rationing. There is a negative association between measures of credit constraint status and adoption variables. The effect is stronger when the demand-side credit rationing is accounted for and when within household variation in credit constraint status overtime is considered as opposed to across constrained and unconstrained households.Practical implicationsExpanding physical access to institutional credit alone may not necessarily spur increased uptake of credit and instant investment by farm households. For a majority of them to take advantage of available credit and improved technology, interventions should also aim at minimizing downside risks.Originality/valueThis paper incorporates the role of downside risk in influencing farmer's decisions to uptake credits and subsequently his/her adoption behaviors. The researcher approached the topic by state-of-the-art method which allows obtaining more reliable results and hence more specific contributions to research and practice.

Sourcing decision under interconnected risks: an application of mean–variance preferences approach

Supply chains are customarily associated with multiple interconnected risks originated from supply side, demand side, or from the unanticipated background uncertainties faced by a firm. Also, effective functioning of supply chain hinges on sourcing decisions of inputs (raw materials). Therefore, there is a striking need to analyse the risk preference of the decision maker while going for optimal sourcing decision under varying degree of interconnected supply chain risks. This study addresses this issue by analysing the comparative static effects under interconnected supply chain risks for a risk averse decision-maker, manufacturing and selling products in a regulated market under perfect competition. The decision-maker faces not only supply-side risk (due to random input material prices) but also interconnected risks arising out of background risk (setup costs risk) and demand-side risk (output prices risk). With preferences defined over the mean and standard deviation of the uncertain final profit, this study illustrates the effects of the changes in the pairwise correlations between the three above mentioned risks on the optimum input choice of the manufacturer. To contextualise this study, an India-based generic drug manufacturer cum seller has been considered as a case in the parametric example of our model. Adaptation of the mean–variance framework helps obtaining all the results in terms of the relative trade-off between risk and return, with simple yet intuitive interpretations.

Supply Chain Risk Factors and Corporate Repute in Pharma Industry of Thailand

Dealing with the risk factors has got much attention specifically in the health and pharmaceutical industry. However, due to complex nature, several risk both financial and non-financial in nature are associated with the title of supply chain in pharmaceutical industry. The purpose of this research is to analyze the various risk factors which are linked with the supply chain in the pharma sector of Thailand to predict the trends in corporate repute. For this purpose, supply side risk factors, demand side risk factors, financial risk factors, and operational risk factors were selected from the existing literature of supply chain. Besides, reputational trends through five sub items were observed through set of these risk factors. To examine the relationship between the variables, a questionnaire was developed for the data collection in the economy of Thailand with a sample of 169 respondents. The results show that supply chain risk factors like lack of information sharing, lack of captain category supplier, interest rate risk, exchange rate risk, machine or equipment failure, quality risk are significantly and adversely impacting on the different dimensions of corporate repute in pharma sector of Thailand. Besides, detailed review of the literature has demonstrated that this research is among the initial contribution for discussing the relationship between supply chain risk factors and their influence on the corporate repute in pharmaceutical sector of Thailand. for this reason, various stakeholders would get the benefit from the study findings in compiling the future studies on the similar topic. However, research limitations like expanding the sample size, considering cross country analysis, and implication of structural modelling approaches may provide some interesting and different results in coming time.

Introduction to the JIPD Special Issue on Infrastructure

Our intention in assembling this special issue of the Journal of Infrastructure, Policy and Development is to offer a state-of-the-art tour through the political economy issues associated with the provision of public infrastructure, and with the use of Public-Private Partnerships (PPPs) in particular. Anyone who is familiar with PPPs cannot fail to be impressed by the diversity of positions and claims regarding their properties. Some scholars maintain that PPPs are an efficient tool to enhance productivity due to their ability to manage demand-side risk. In contrast, other scholars see in PPPs a scheme whereby the public assumes the risk while the private partner takes the profit.

A novel classification of supply chain risks: Scale development and validation

Purpose: Supply chain has become an essential element for any organization but risks are the major obstacles in achieving the performance even it can disrupt not only the organization but a whole system. Thus it is compulsory to manage the risks efficiently and effectively. Risk cannot be managed until properly identified, there are numerous studies on risk identification, after comprehensive literature, it has been revealed that the study that identifies overall supply chain risk is scaring. The manufacturing sector of any country is considered as the backbone of any economy, in Malaysia it is the second largest sector in economic contribution and highest in productivity level. The aim of this study is to provide a reliable tool to assess the overall supply chain risks of Malaysian manufacturing through a systematic process.Design/methodology/approach: A detail literature review has been done for categorization of overall supply chain risk sources. Then an instrument has been developed from a pool of items. The questionnaire was purified through pretesting, pilot testing (by the exploratory view) and reliability and validity tests. The data were collected by email from Federation of Malaysian Malaysia (FMM-2017) through systemic probability sampling. Total 132 final responses have been considered for exploratory factor analysis through SPSS 23.Findings: The finding of this study revealed that overall supply chain risks can be categories into seven constructs that are supply side risks, process side risks, demand side risks, logistic side risks, collaboration side risks and environment side risks and the final questionnaire is consisting of 57 items.Research limitations/implications: This study covered tier 1 members of the supply chain. Secondly, the supply chain of manufacturing organizations only has been considered.Practical implications: This study will help the managers to understand what kind of risk sources they can face and which type of risks under these risk sources they should consider while decision making.Originality/value: This article will justify the need for Malaysian manufacturing by providing a validated and reliable instrument for the identification and assessment of their risks under major supply chain risk sources.

Demand and supply factors of iron-folic acid supplementation and its association with anaemia in North Indian pregnant women.

Anaemia prevalence in pregnant women of India declined from 57.9% to 50.3% from National Family Health Survey (NFHS)-3 to NFHS-4. However, over the course of that decade, the uptake of iron and folic acid (IFA) supplementation for 100 days of pregnancy improved by only 15%. To understand demand side risk factors of anaemia specifically related to IFA intake, an in-depth survey was conducted on pregnant women (n = 436) in 50 villages and wards of Sirohi district of Rajasthan, India. At the demand side, consistent IFA consumption in the previous trimester was inversely and strongly associated with anaemia (OR: 0.26, 95% CI: 0.12, 0.55). Reasons for inconsistent consumption included not registering to antenatal clinic, not receiving IFA tablets from the health worker and perceived lack of need. At the supply side, an analysis of IFA stock data at various levels of the health care (n = 168) providers from primary to tertiary levels showed that 14 out of 52 villages surveyed did not have access to IFA tablets. The closest availability of an IFA tablet for 16 villages, was more than 5 km away. To improve the uptake of IFA supplementation and thereby reduce iron deficiency anaemia in pregnant women, a constant supply of IFA at the village or sub-centre level, where frontline workers can promote uptake, should be ensured.

Risk identification and analysis for new energy power system in China based on D numbers and decision-making trial and evaluation laboratory (DEMATEL)

Abstract As more new energy power is integrated into the power grid in a large scale, the security problem of the new energy power system (NEPS) has been paid more and more attention in China. Therefore, in order to identify the risk elements of NEPS in China and analyze their internal influence relations, this paper proposes a risk identification and analysis model of NEPS based on D numbers theory and decision-making trial and evaluation laboratory (DEMATEL) method. First, a risk element set is established including new energy resource risk, technical risk, demand side risk, grid side risk and human factor, and Crombach α reliability analysis is introduced to verify the rationality of this set. Then, D numbers theory is employed to integrate the expert evaluation information and the direct relation matrix is obtained. Next, based on DEMATEL method, the cause-effect relations and significance degree of risk elements are analyzed. The results indicate that C10, C15 and C14 are in the top three according to prominence values which are 6.455, 6.186, 5.854 respectively. Meanwhile 18 criteria are divided into 8 causal factors and 10 effect factors which are also analyzed by θ in total relation matrix. Finally, according the risk analysis results, managerial and policy implications are explored. This study concluded that the proposed method provides a strong basis for future academic research.

Bi-level multi-objective optimization model for last mile delivery using a discrete approach

To reduce traffic congestion as well as to improve workforce productivity, a bi-level multi-objective model is proposed for an urban logistics metropolis, in which there are two decision-makers, one is the center operator (leader) of an urban consolidation center at the upper level and the other is the logistics party (follower) who manages the delivery at the lower level. In this model, we suppose the supply side risk and the demand side risk exist simultaneously and the decision-makers at both levels are risk-averse. The leader makes his decision by considering the demand from the follower and his own economic efficiency, environmental emissions, and highly dependent time windows with penalties for late delivery. The follower arranges his transportation plan by considering the cost for the order from retail stores and the time window set by the center operator at the upper level. To solve the resulting bi-level multi-objective model, a new solution method is constructed. Numerical tests are given to show the efficiency of our method.

Managing supply chain risks and vulnerabilities through collaboration: Present and future scope

Risk is everywhere and part of every operation. Therefore, today, risk management is becoming critical part of the organizations’ long term goals. Capabilities to managing diverse risks are considered important attributes that differentiate a successful business from others. To acquire such capabilities, firms are increasingly pursuing multiple risk management strategies. Although significant work has been done in the area of supply chain risk management, the research lacks a unified framework exploring relationship between risk perception, risk management, collaboration and firm performance. We further highlight that the agri-food industry plays a critical role in many countries through the provision of employment, income and contribution to economic development. However, this industry is largely untapped in the extant literature of supply chain risk management. The current paper attempts to bridge these gaps in the existing literature. The analysis is based on a pilot test comprising five semi-structured interviews with the managers of firms at different nodes within the Australian citrus supply chain. The findings suggest that the firms are highly vulnerable to various risks due to perishable nature of products, uncertain weather conditions, changing consumer preferences and stringent and rapidly changing food safety regulations. Based on the results of study and insights from the existing literature, we propose a conceptual framework to examine the relationship between perceived risks, risk management and firm performance. Our framework also examines the moderating role of collaboration in managing risks and improving firm performance in a supply chain. The framework is underpinned by the key assumptions of contingency theory and relational view. This paper provides theoretical contributions by integrating and extending contingency theory and relational view from organizational studies into supply chain network perspective. The findings of the paper also enhance managers’ understanding of divergent risks and appropriate risk management measures to mitigate them. Specifically, this paper emphasizes for a strong vertical and horizontal collaboration among the firms within the supply chain. This paper contributes to the extant literature in the field of supply chain risk management as well as agri-food supply chains by investigating the risks faced in supply chains and how they determine the risk management strategies undertaken by firms to maintain or enhance performance. The paper adopts holistic approach, as opposed to the many past studies which focus on either supply side risks or demand side risks. In doing so, this paper extends the unit of analysis from dyadic to a network perspective.

Making apartments affordable: moving from speculative to deliberative development

Urban consolidation policies in Australia presuppose apartments as the new dominant housing type, but much of what the market has delivered is criticised as over-development, and as being generic, poorly-designed, environmentally unsustainable and unaffordable. In contrast to the usual focus on planning regulation and construction costs as the primary issues needing to be addressed in order to increase the supply of quality, affordable apartment housing this paper uses Ball’s (1983) ‘structure of provision’ approach to outline the key processes informing apartment development to reveal a substantial gap in critical understanding of how apartments are developed in Australia, and identifies economic problems not previously considered by policymakers. Using mainstream economic analysis to review the market itself, the authors found high search costs, demand risk, problems with exchange, and lack of competition present key barriers to achieving greater affordability and limit the extent to which ‘speculative’ developers can respond to the preferences of would be owner-occupiers of apartments. The existing development model, which is reliant on capturing uplift in site value, suits investors seeking rental yields in the first instance and capital gains in the second instance, and actively encourages housing price inflation. This is exacerbated by lack of density restrictions, such as have existed in inner Melbourne for many years, which permits greater yields on redevelopment sites. The price of land in the vicinity of such redevelopment sites is pushed up as landholders' expectation of future yield is raised. All too frequently existing redevelopment sites go back onto the market as vendors seek to capture the uplift in site value and exit the project in a risk free manner. The paper proposes three major reforms. Firstly, that the market for apartment development be re-designed following insights from the economic field of ‘Market Design’ (a branch of Game Theory). A two-sided matching market for new apartments is proposed, where demand-side risks can be mitigated via consumer aggregation. Secondly, consumers should be empowered through support for ‘deliberative’, or ‘do-it-yourself’ (DYI) development models, in order to increase competition, expand access, and promote responsiveness to consumer needs and preferences. Finally, planning schemes need to impose density restrictions (in the form of height limits, floor space ratios or bedroom quotas) in localities where housing demand is high, in order to dampen speculation and de-risk development by creating certainty. However restrictions on over-development on larger infill sites needs to be offset by permitting intensification of ‘greyfield’ suburbs. Aggregating existing housing lots to enable precinct regeneration and moderate height and density increases would permit better use of airspace thus allowing design outcomes that can optimise land use while retaining amenity.

Risk capital constraints to innovation in services

Purpose – This paper aims to understand the factors associated with perceptions of venture capital as a barrier to innovation in an important subset of knowledge-intensive service firms – technology-based business services. A general and longstanding neglect of services in studies of innovation and a common focus of innovation studies on the availability of, and demand for, risk capital has been noted. Design/methodology/approach – In exploring these issues, the authors draw on survey data collected from 264 technology-based service firms located in Scotland and Northern England. The data are subjected to bivariate and multivariate statistical analyses to help explore the extent of demand-side risk capital concerns. Findings – It was found that smaller, faster growing and R&D-intensive firms perception greater equity barriers. Moreover, firms who are relatively happy about the managerial competencies available to them, but who identify deficiencies in marketing skills and the availability of external debt finance (which may say something broadly about their financial neediness), are shown to be “needy”. Originality/value – Studies of venture capital demand are relatively rare. Studies involving innovative service firms are rarer still. Given the prominent role of service firms in advanced economies and the changing perspective of the role of services in innovation, studies of financial constraints to innovation in services are timely. Innovation policy in advanced economies continues to be premised on patterns identified in manufacturing industries. This paper contributes to a broader perspective that views [technology-based] business services as dynamic innovation actors.

Game Theoretic Approach for Global Manufacturing Planning Under Risk and Uncertainty

In this paper, we present a game theoretic model in which one manufacturer and its suppliers are coordinated. Quality levels of products from suppliers are considered. Due to fluctuation of demand resulting from varying quality levels, manufacturers are subject to demand-side risks. The objective of the research is to help decision making between manufacturers and suppliers in order to improve level of quality. Stackelberg game is applied to coordinate the manufacturer and suppliers Then, Pareto efficient solutions are utilized to generate supplier's optimal response functions. Computational experiments are conducted to demonstrate the effectiveness of the proposed method.

Buyer–supplier partnership quality and supply chain performance: Moderating role of risks, and environmental uncertainty

Summary In this paper, we examine the relationship between buyer–supplier partnership quality, and supply chain performance, in the presence of supply and demand side risks and environmental uncertainty. Based on the theoretical underpinnings of resource-based view, relational capital theory, and transaction cost economics, we propose a positive relationship between partnership quality and supply chain performance, which is strengthened in the presence of high demand and supply-side risks, but weakened in the presence of high environmental uncertainty. Empirical evidence, based on the survey data of 127 US firms supports a majority of our arguments. We discuss theoretical and practical ramifications of these findings and offer future avenues of research.

Global supply chain network dynamics with multicriteria decision-making under risk and uncertainty

Abstract In this paper, we consider the dynamics of a global supply chain network economy in the presence of risk and uncertainty in which distinct speeds of adjustment are included. We assume three tiers of decision-makers: manufacturers, distributors, and retailers, who acquire the product in order to satisfy the demand at the demand markets. The manufacturers, distributors, and retailers may be based in the same or in different countries and may transact in different currencies. We allow for electronic transactions in the form of electronic commerce between the manufacturers and the retailers as well as between the distributors and the retailers since the retailers may be physical or virtual. In addition, supply-side risk and demand-side risk are handled in our formulation with the former being expressed as a multicriteria decision-making problem for each manufacturer and distributor (with distinct weights associated with the criteria) and the latter being handled with the use of uncertain demands. The proposed framework allows for the modeling and theoretical analysis of such global supply chain networks, which involve competition within a tier of decision-makers but cooperation between tiers. Numerical examples are provided for illustrative purposes.

Supply chain networks, electronic commerce, and supply side and demand side risk

In this paper, we develop a supply chain network model in which both physical and electronic transactions are allowed and in which supply side risk as well as demand side risk are included in the formulation. The model consists of three tiers of decision-makers: the manufacturers, the distributors, and the retailers, with the demands associated with the retail outlets being random. We model the optimizing behavior of the various decision-makers, with the manufacturers and the distributors being multicriteria decision-makers and concerned with both profit maximization and risk minimization. We derive the equilibrium conditions and establish the finite-dimensional variational inequality formulation. We provide qualitative properties of the equilibrium pattern in terms of existence and uniqueness results and also establish conditions under which the proposed computational procedure is guaranteed to converge. We illustrate the supply chain network model through several numerical examples for which the equilibrium prices and product shipments are computed. This is the first multitiered supply chain network equilibrium model with electronic commerce and with supply side and demand side risk for which modeling, qualitative analysis, and computational results have been obtained.

Global Supply Chain Networks and Risk Management

In this paper, we develop a global supply chain network model in which both physical and electronic transactions are allowed and in which supply-side risk as well as demand-side risk are included in the formulation. The model consists of three tiers of decision-makers: the manufacturers, the distributors, and the retailers who may be located in the same or in different countries and may conduct their transactions in distinct currencies. We model the optimizing behavior of the various decision-makers, with the manufacturers and the distributors being multicriteria decision-makers, and concerned with both profit maximization and risk minimization. The retailers, in turn, are faced with random demands for the product. We derive the governing equilibrium conditions and establish the finite-dimensional variational inequality formulation. We provide qualitative properties of the equilibrium product flow and price pattern in terms of existence and uniqueness results and also establish conditions under which the proposed computational procedure is guaranteed to converge. Finally, we illustrate the global supply chain network model and the computational procedure through several numerical examples. This research extends the modelling, analysis, and computation of solutions to decentralized supply chain networks in the presence of electronic commerce and risk management to the global arena.

A demand-side view of risk adjustment.

This paper analyzes the efficient allocation of consumers to health plans. Specifically, we address the question of why employers that offer multiple health plans often make larger contributions to the premiums of the high-cost plans. Our perspective is that the subsidy for high-cost plans represents a form of demand-side risk adjustment that improves efficiency. Without such subsidies (and in the absence of formal risk adjustment), too few employees would choose the high-cost plans preferred by high-risk workers. We test the theory by estimating a model of the employer premium subsidy, using data from a survey of large public employers in 1994. Our empirical analysis shows that employers are more likely to subsidize high-cost plans when the benefits of risk adjustment are greater. The findings suggest that the premium subsidy can accomplish some of the benefits of formal risk adjustment.

Contemporary issues affecting the demand for business air travel in the United States

Business travel is the cornerstone of US airline industry revenues and profits. However, recent evidence suggests problematic trends in business passenger demand. Pressures to reduce travel costs, corporate downsizing/re-engineering, improving telecommunications technologies, and increased automobile substitution could shift the balance of power toward corporate buyers, collectively threatening the future prosperity of high cost carriers. This paper examines demand-side risks to US business air travel. It concludes that air carrier control of the business travel market is weakening and customer loyalty to airline transportation has diminished. Carriers are advised to maintain cost controls and be more trend conscious and customer responsive. Failure to adjust strategies may accelerate the use of airline substitutes in the future.