Measuring the supply chain risk and vulnerability in frequency space

Global supply chains are exposed to different kinds of risks that increase along with increasing globalisation. There appears to be a cost associated with the event that certain goods are not at the required location (location of activity cell of a global supply chain), at the required time, and of the required quality and quantity. It is suggested that the costs of risk in a supply chain, which is exposed to internal and external risk are measured using net present value of activities approach. This is how the vulnerability of a supply chain is predicted. The model of risk measurement is based on the previous work of Input–Output Analysis and Laplace transforms of the supply chain model developed by Grubbström and his Linköping School (IPE), based on the ideas of MRP–DRP stochastic modelling, presented in the paper by Bogataj and Bogataj which describes the compact presentation of the lead-time perturbations in production–distribution networks. Parametric linear programming approach is suggested to achieve numerical results.