Research On Insurance Solutions For Supply Disruption Risk

The business interruption insurance was introduced into the research of supply chain disruption risk management in this paper.At present the research on the business interruption insurance mainly focuses on the introduction of insurance terms and the comparison of Chinese and foreign insurance systems.On the one hand,there are few researches on the application of business interruption insurance in supply chain risk management.On the other hand,the research on the supply chain interruption risk management mainly focuses on operation management,Such as inventory management,multi-source procurement,back-up supply and business process optimization,lacking the research combined the business interruption insurance with the supply chain risk management.In the third chapter,we only consider the influence of the downstream manufacturers in the supply chain on the business related strategies.Assuming that the manufacturer's loss of profits is the subject of the insured,combined with the deductible and the compensation limit of the business interruption insurance,the EOQ model is established about the profit expression of the enterprise in three cases:no interruption occurred,interruption occured but not buying business interruption insurance and the interruption occured and buying the business interruption insurance,and the application of the business interruption insurance strategy to the enterprise inventory and profit impact is analysed,attempting to find a balance between the cost of the stock due to multiple orders,the out-of-stock costs resulting from the less order,the fixed costs affected by the order quantity and the penalty costs resulting from the interruption.The conclusion is that interruption increases the amount of inventory ordered by the enterprise compared with the absence of an interruption,but the application of the business interruption insurance strategy can reduce the rate of increase.In the fourth chapter,the impact of the supply chain downstream manufacturers to buy business interruption insurance on supply chain risk management is extended from single node to double nodes.Considering a simple two level supply chain(supplier and manufacturer),supposing supplier and manufacturer are decentralized decision-making,by analysing the three cases:no interruption occurred,interruption occured but not buying business interruption insurance and the interruption occured and buying the business interruption insurance,the changes in the wholesale price of the supplier,the changes in the market demand and the supplier's sales price are explored.And the manufacturer's profit function is built to explore the impact of business interruption insurance on supply chain decisions.The conclusion is that the manufacturer's sales price will be higher than the uninterrupted situation;the market demand will be reduced,the manufacturer's profit will be reduced;the manufacturer's purchasing price changes depends on the supplier of the relationship between the cost of goodwill and the cost of the manufacturer's out of stock;the supplier's profit change depends on the supplier's production costs,the supplier's goodwill costs and the manufacturer's out-of-stock costs.In the event of an interruption and the purchase of a business interruption insurance,the manufacturer's purchase price will increase,but the size of the manufacturer's purchase price depends on the supplier's goodwill costs and the manufacturer's out-of-stock costs.The relationship between the size of the manufacturer's sales price depends on the manufacturer's production costs,the supplier's goodwill costs,and the manufacturer's out-of-stock costs.The conclusion of this paper can increase the research results in the field of business interruption insurance combined with supply chain interruption risk management,and provide guidence for the enterprise decision maker on the cost and price decision to improve the risk management level of enterprise.