Abstract:

Effective supply chain risk management requires identification and assessment of risks and disruptions addressing two dimensions: the likelihood of an event leading to a risk (probability) and the supposed effect on a supply chain when the event occurs and the risk is established (potential impact). While frameworks can be developed for impact assessment, the probability estimation and measurement is often less clear. This is particularly true for a supply chain in which data about risk probability is either not available or not relevant. Such probability is therefore based on experts judgments taking in consideration their own skills. In order to help a practitioner assessing probability with some degree of confidence, this paper introduces an approach for the estimation of the probability of supply chain risk occurrence based on exposure analysis