Production Disruptions and Inventory Policy



An overview of the high cost of supply disruptions in lost productivity, loss of goodwill, and damage to facilities. Supply uncertainty and demand uncertainty in supply chain have several similarities, and that firms have used similar strategies such as holding inventory or using multiple suppliers to protect against both supply and demand uncertainty. However, many of the lessons learned for addressing demand uncertainty do not hold for supply uncertainty. Potential responses to supply chain disruptions based on their classification. Classifications include acts of nature or acts of humans, the point the disruption occurs in the supply chain life cycle, the type of disruption, and the managerial impact. Hereunder five mitigation strategies are given to encounter disruption: