Decision-making Model And Coordination Mechanism For Supply Chain Resilience Investment

In order to reduce the risk of supply disruption,the supplier needs to optimize the level of risk resistance capacity before a disruption.Supply may recover in a short time after the disruption without any additional investment,otherwise it needs to invest in supply chain resilience.Suppliers usually dominate the investment,sometimes the manufacturer will involve in it.The resilience of supply chain is Divided into two processes of risk resistance and recovery,by which this paper established the decision-making model of investment in the supply chain resilience aimed to minimum expected losses.In the model,there are two primary forms in the system.The first situation is that supplier optimizes the level of risk resistance capacity and recovery capacity alone,the second situation is that the supplier invests in risk resistance capacity and the manufacturer invests in recovery capacity.Through the comparison of two ways,it reveals the influence of supplier loss per unit time and manufacturer loss per unit time to the optimal supply chain resilience investment model.We use the theta as a parameter to describe the severity of disruption,the smaller the theta is,the more serious the disruption,by which we calculate the possibility of recovery during the first situation.The results show that suppliers and manufacturers are more sensitive to theta changes if supplier optimizes the level of risk resistance capacity and recovery capacity alone,it can reduce risk by making decision separately,and we find that it's better for both supplier and manufacturer to invest alone by supplier unless manufacturer loss per unit time is high enough.Reference to the rewards and punishment contract in the traditional supply chain coordination and performance-based contract,we try to coordinate the investment strategies.The results show that supply chain can be coordinated through both two contracts,and supplier and manufacturer can split the profits at liberty,furthermore,we find that performance-based contract is more practical.