IDEAS home Printed from https://ideas.repec.org/a/taf/tprsxx/v59y2021i20p6252-6269.html
   My bibliography  Save this article

The value of flexibility in mitigating supply chain transportation risks

Author

Listed:
  • Roberta Pellegrino
  • Nicola Costantino
  • Danilo Tauro

Abstract

This paper investigates the value of the flexibility created by the transportation options in mitigating supply chain transportation risks. We accomplish this aim by developing an innovative computational model which uses the Real Option Valuation method to model the inner flexibility mechanism of the transportation options to choose between the Safety Net carrier and the spot market carrier on the basis of the actual conditions of the spot market (price, service level, and required transportation capacity), which is the foundation of the mitigation capability of transportation options. Through the case of a real supply chain of a large Fortune 100 multinational leader in the Fast Mover Consumer Goods (FMCG) industry, we also investigate the implications of a transportation options response in case of several sources of uncertainties, namely transportation capacity shortage, price volatility and service level reliability. Findings of the application support the understanding of which conditions increase the value of flexibility of the transportation options and how much flexibility is attractive given the initial sunk cost to acquire it.

Suggested Citation

  • Roberta Pellegrino & Nicola Costantino & Danilo Tauro, 2021. "The value of flexibility in mitigating supply chain transportation risks," International Journal of Production Research, Taylor & Francis Journals, vol. 59(20), pages 6252-6269, October.
  • Handle: RePEc:taf:tprsxx:v:59:y:2021:i:20:p:6252-6269
    DOI: 10.1080/00207543.2020.1811417
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00207543.2020.1811417
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00207543.2020.1811417?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chih-Hung Hsu & Ming-Ge Li & Ting-Yi Zhang & An-Yuan Chang & Shu-Zhen Shangguan & Wan-Ling Liu, 2022. "Deploying Big Data Enablers to Strengthen Supply Chain Resilience to Mitigate Sustainable Risks Based on Integrated HOQ-MCDM Framework," Mathematics, MDPI, vol. 10(8), pages 1-35, April.
    2. Muhamad Deni Johansyah & Sundarapandian Vaidyanathan & Aceng Sambas & Khaled Benkouider & Seyed Mohammad Hamidzadeh & Monika Hidayanti, 2024. "Dynamical Analysis and Sliding Mode Controller for the New 4D Chaotic Supply Chain Model Based on the Product Received by the Customer," Mathematics, MDPI, vol. 12(13), pages 1-21, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tprsxx:v:59:y:2021:i:20:p:6252-6269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TPRS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.