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RISK REDUCTION OF THE SUPPLY CHAIN THROUGH POOLING LOSSES IN CASE OF BANKRUPTCY OF SUPPLIERS USING THE BLACK-SCHOLES-MERTON PRICING MODEL
2013
Some Recent Advances in Mathematics and Statistics
In recession times, slower demand, shrunk liquidity, and increasing pressure on cost can lead to bankruptcy of suppliers. The risks due to supplier bankruptcy include (a) losses due to supply chain disruption, (b) delayed or stopped finished goods shipments, (c) difficulty in finding cost-effective alternate suppliers and sourcing contracts, (d) emergency procurements, (e) loss of reputation and market share loss, etc. Bankruptcy models can be used to estimate the probability that a supplier
doi:10.1142/9789814417983_0018
fatcat:2pf5ropdm5gz3cetayeb74423y