Simulation-Based Measurement of Supply Chain Risks

For today’s supply chains, risk management becomes an important instrument, which can protect a system from sudden collapses. Still, the meaning of the supply chain risk and techniques for its evaluation and mitigation still continue to be extensively researched. In this paper, simulation is used for risk management in supply chains. Within the discussed research, the supply chain risk is defined as possible disruptions that can affect the supply chain ability to function normally. Due to that, system reliability parameters are taken as a basis for risk evaluation. The difficulties of making the corresponding assessments mathematically are argued because of supply systems complexity. Then, simulation is applied as an effective tool for risk evaluation and management of the predefined supply chain. At the same time, the reliability theory mathematics is used for the created simulation model validation