Measuring procurement flexibility in disastrous environment

Abstract

Flexibility in supply chain is proved to be a way of countering uncertainties and planning strategies. In this paper an attempt is made to evaluate procurement flexibility at supplier buyer interface in disastrous scenarios. This can be considered to be an extension of research work carried out by Das and Abdel-Malek (2003). This paper contributes by analysing supply chain disruptions in extremely risky environments that are coupled with uncertainties in demand and lead times from downstream. These uncertainties are captured by a probability density functions, more precisely the normal distributions. A flexibility measure ψ is designed which not only ensures timely supply of material from the supplier but also ensures to maintain a continuous supply at minimal risk to buyer in case of complete disruptions at supplier's production sites. As this flexibility measure ψ varies from 0 to 1, it reflects a 0 to 100% flexibility of supplier from buyers' viewpoint. Copyright © 2014 Inderscience Enterprises Ltd.