SSPLAXSupplier Disruption Recovery
During the outage, which orders can we protect, and what recovery sequence costs the least?
Orders protected
Tiers 1 & 2 shipped in full
Controlled shortfall
~9,000 Tier-3 units short
Least-cost recovery
$2.58M (≈$990k penalties)
Recovery network
Disruption recovery
Situation
The primary supplier is offline for eight weeks. Safety stock, expedited freight, and a delayed backup source must cover orders with different penalty levels.
Model logic
Minimizes weekly recovery cost across the penalty tiers, using safety stock, expedited freight, and backup supply as available.
Safety stock covers the first three weeks; expedited freight bridges to backup supply in Week 4.
Expediting Tier 3 costs more than accepting its contractual penalty.
The lowest-cost sequence is stock → expedite → backup → primary return.
Stock, expedited freight, and backup supply cover Tiers 1 and 2. The remaining shortfall falls on Tier 3.