Analysis of risk mitigation by decentralized ordering in multi-tier supply chain

We address developing the simulator for multi-tier supply chain to evaluate the effect of risk mitigation by decentralized ordering. A simulator for 2-tier supply chain has been developed through our research. Because the relationship between the suppliers in the multi-tier supply chain is similar to the relationship between the retailer and the supplier in the 2-tier supply chain. In order to realize the simulation for the multi-tier supply chain, we combine the simulator for the 2-tier supply chain with the functions of price decision and updating the probability distribution of the downtime of the suppliers. Applying the simulator to the multi-tier supply chain model, we discuss the effect of the risk mitigation by decentralized ordering.