A Study on Risk Propagation in Supply Chains: Risk Recovery, Transmissibility, and the Induction Mechanism

Abstract

Abstract: This study integrates the dimensions of risk recovery and transmissibility to improve the categorization of economic, product, people and environmental risks in supply chains. A risk propagation model suitable for the complexity of supply chain networks is developed by considering the interdependence between various risks and introducing an induction mecha-nism. Numerical simulation is used to investigate the risk propagation mechanism in supply chains. The results show that the induction mechanism greatly accelerates risk propagation and expands the scope of risk propagation; the risk recovery rate has a more pronounced effect on the propagation dynamics than the infection rate; and risks propagate faster through firms with higher Betweenness Centrality. These findings highlight the urgent need for gov-ernments to provide targeted support to strategic supply chains to help leading firms over-come bottlenecks and promote the independent development of core technologies in order to enhance the resilience of supply chains to risks.

Keywords: Supply Chain Risk, Risk Coupling, Risk Propagation, Complex Network