Supply Chain

Supplier Disruption Recovery

During the outage, which orders can we protect, and what recovery sequence costs the least?

A critical component supplier goes down for a multi-week outage. Over an eight-week recovery horizon, the team starts with 6,000 units of component safety stock and owes about 4,000 units a week of orders split across three penalty tiers: a small strategic tier, a standard tier, and a long-tail tier. Three recovery interventions are available: expedited air freight (capped and premium-priced), a backup supplier that cannot ship until it qualifies in week 4, and the primary line returning in week 7. Every intervention costs money; every unshipped order costs a contractual penalty.