Supply Disruption Model of Ordinary Medicine with Failure Correlation

Abstract

Abstract: To solve the prevention problem of disruption of ordinary medicine in a supply chain, an effective way is to establish a robust and reliable disruption model so as to find best suppliers for the customers. The issue addressed in this work is how to eliminate the limitations caused by assumption that suppliers are independence. After qualitatively analyzing the correlation between the suppliers, a quantitative model about the correlation between the suppliers is developed by using the reliability theory. Then, by using the characteristics of ordinary medicine, a supply disruption model of ordinary medicine with failure correlation between suppliers is proposed. Result shows that, by minimizing the expected total cost to find the most reliable suppliers for customers, the model can reduce the disruption risk of ordinary medicine. At the same time, by doing so, the limitations resulting from the assumption of supplier independence are eliminated and thus more reliable solution can be obtained.

Key words: ordinary medicine, supply chain, disruption, failure correlation

Zhao Xiao-song，Li Li，Wu You，Wu Jin-hui. Supply Disruption Model of Ordinary Medicine with Failure Correlation[J]. Industrial Engineering Journal , 2013, 16(1): 73-78.

References

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