Model-based decision support in supply chains - requirements for monetary supply risk quantification

Optimization of the total risk level by economically feasible risk mitigation can only be achieved through a well-grounded monetary evaluation of the current risk situation. In the field of material supply and procurement directly affecting production and distribution processes a lack of such quantitative simulation model has been identified. Efficient modeling and simulation of monetary supply risk quantification in manufacturing enterprises requires target oriented simplification of the quantification model. Thereby requirements from three different disciplines need to be considered: (1) procurement in supply chains, (2) supply risks, and (3) monetary risk quantification. In this paper we propose a target oriented approach to deviate and discuss requirements for an applicable monetary supply risk quantification model particularly focusing on supply risks providing meaningful results to derive reasonable risk mitigation measures. Hence, a requirement checklist will be provided to be considered in development of monetary supply risk quantification models.