Abstract- We study a disruption management problem that is multi-companies build a strategy joint inventory in horizontal alliance to co-deal with the unexpected events. We construct the inventory model based on minimization of cost. In the model, we consider the probability of the disruption happened and the impact of eachcompany in alliance at the same time. We analysis the different inventory strategies of single company and horizontal alliance companies when demand of material/spare parts increase rapidly, respectively. In addition, we compared the optimal inventory level of the two different conditions. Finally, we obtain the changing trendof the cost in different conditions according to the numerical analysis.
Keywords- Disruption Management, Supply network, Inventory strategy, Horizontalalliance, Joint inventory
Introduction
With the rapid growth of technology and global economy, it changesfrom the single structure to the complex supply network. The complexity of supply network aggravates the vulnerability of network when an unexpected event happened. Inventory is proved to be an efficacious way to deal with it, by providing the buffer zone after the events outbreak. But because of the lean thinking, it’s resulted that most of companies in the supply chain can not handle the demand increase rapidly or supply interruption after the unexpected events happened. It’s a kind of method to solve the disruption problem that multi-companies in the supply network build a joint strategy inventory through horizontal alliance.
There are some literatures which study the vertical cooperation mechanism of supply chain to co-prevented unexpected events, but it lacks the research of horizontal cooperation mechanism. Actually, with the development of global manufacture, different companies in the different supply network node may use the same or similar kinds of spare parts and materials. For example, the same CPUs are used in different brands of PC products. Based on that, it’s possible for companies of different supply network set up a joint strategy inventory through horizontal alliance.
In this paper, we study a problem that is multi-companies build a joint inventory of disruption management strategy in horizontal alliance. After the unexpected eventshappened, demand of companies in alliance will be different for the same/similar spare part or material. Comparing with the independent strategy, the co-prevent strategy is cost reduction way to deal with the supply interruption caused by unexpected events. Because of the different marketing condition and geographic location of every company in alliance, it’s different impact of different company although they are facing the same unexpected events. In the paper, we consider the two kinds of probability at the same time, which are the disruption and the impact of every alliance company, and build a joint inventorystrategymodel of horizontal allianceto co-handle the unexpected events.
In this paper, we study a problem that is multi-companies build a joint inventory of disruption management strategy in horizontal alliance. After the unexpected eventshappened, demand of companies in alliance will be different for the same/similar spare part or material. Comparing with the independent strategy, the co-prevent strategy is cost reduction way to deal with the supply interruption caused by unexpected events. Because of the different marketing condition and geographic location of every company in alliance, it’s different impact of different company although they are facing the same unexpected events. In the paper, we consider the two kinds of probability at the same time, which are the disruption and the impact of every alliance company, and build a joint inventorystrategymodel of horizontal allianceto co-handle the unexpected events.