The applications of BN
in Supply Chain
DAI KUN & WANG JIAQI
Supply Chain
a system of organizations, people, activities, information,
and resources involved in moving a product or service
from supplier to customer
Risks in Supply Chain
Internal risks
human errors, equipment failures, materials quality
…
External risks
exchange rate changes, legislation, natural events
…
Supply Chain Risk Management(SCRM)
Identify risks
Assess risks
Mitigate risks
Monitor risks
Aim: give strategies for reducing negative impacts and enhancing positive effects of risk.
Bayesian Network
subjective causal relationships
---Relationships between risks and their impact
objective conditional probability distributions
---probability of the occurrence of the risk
Information Risks
Information security
breakdown
Information sharing
leakage
reluctance in sharing information
Information Risk – Research Model
Research Model
Information Risk - Analysis
Risk analysis
Top to bottom
Bottom to top
Propagation analysis
Sensitivity analysis
Information Risk - Limitation
The difficulty of getting large enough data from current
and potential suppliers.
The difficulty of guaranteeing the accuracy of data because
of subjective of human.
Supply Chain Operation Reference(SCOR)
a standard model for SCP evaluation which have uncertainty
in its metrics
SCOR Model - Performance Attributes
Customer- facing performance attributes
Reliability
Responsiveness
Flexibility
Internal-facing attributes
Cost
Assets
SCOR Model
Hybrid Framework – BN & Game Theory
Uncertainty in supply chain operations affects performance
BN : capture interdependency between risk factors and
Game theory : Model risks of misaligned objectives (conflicting
incentives) among supply chain partners
Game Theory
Players (supply chain stakeholders)
Rules of the game (policies, constraints)
Complete set of actions or decisions for each player
Outcomes or pay-o s resulting from each set of decisions
Simultaneous-Move Games
Sequential-Move Games
Game Theoretic Analysis
direct costs& indirect costs
Misaligned objectives
Game theoretic risks
Fair strategy
Risk Propagation
Supply network & Risk graph
Risk Propagation
Expected location risk contribution factor(ELRCF):
Propagation ratio:
The propagation ratio may be high while the ELRCF may be low
Shows how much risk spreads relative to its own loss at the location.
Summary and Q&A Part
Thank you!