The Analysis of Rush Orders Risk in Supply Chain: A Simulation Approach

Satisfying customers by delivering demands at agreed time, with competitive prices, and in satisfactory quality level are crucial requirements for supply chain survival. Incidence of risks in supply chain often causes sudden disruptions in the processes and consequently leads to customers losing their trust in a company's competence. Rush orders are considered to be one of the main types of supply chain risks due to their negative impact on the overall performance, Using integrated definition modeling approaches (i.e. IDEF0 & IDEF3) and simulation modeling technique, a comprehensive integrated model has been developed to assess rush order risks and examine two risk mitigation strategies. Detailed functions sequence and objects flow were conceptually modeled to reflect on macro and micro levels of the studied supply chain. Discrete event simulation models were then developed to assess and investigate the mitigation strategies of rush order risks, the objective of this is to minimize order cycle time and cost.