Supply chain network design under production disruption risk

A model reguarding the supply chain network under production disruption risk was developed based on the concept of supernetworks and the theory of variational inequalities. The model consists of multiple suppliers and multiple manufacturers, and considers the impact of production disruption risks on the costs, profits, and capacity decisions of the supply chain firms. The variational inequality formulation was used to express the equilibrium conditions of the supply chain network where all decision makers' optimal conditions are simultaneously satisfied. The conditions for the existence of solution and conditions of monotonicity were provided.