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Managing Inventory In Global Supply Chains Facing Port-Of-Entry Disruption Risks, Alan Erera, Maciek Nowak, Chelsea White

Information Systems and Operations Management: Faculty Publications & Other Works

Ports-of-entry are critical components of the modern international supply chain infrastructure, particularly container seaports and airfreight hubs. The potential operational and economic impact resulting from their temporary closure is unknown, but is widely believed to be very significant. This paper investigates one aspect of this potential impact, focusing specifically on the use of supply chain inventory as a risk mitigation strategy for a one supplier, one customer system in which goods are transported through a port-of-entry subject to temporary closures. Closure likelihood and duration are modeled using a completely observed, exogenous Markov chain. Order lead times are dependent on the …