Managing Flexibility in the Supply Chain by Real Options Approach

The purpose of this study is to provide a model for evaluating the flexibility between different components of the supply chain. The methodology of the research is based on two distinct viewpoints. Real options theory and comprehensive study of theoretical foundations and identifying and grouping the indicators using factor analysis. Supply chain flexibility is presented and its significance is examined. This is trailed by a survey of the flexibility literature. Next, devices for assessing flexibility are talking about: Decision analysis, decision trees, and real options. This paper analyzes how firms ought to get ready against disturbance in their supply chain and focuses on how they can utilize real options to esteem dual sourcing procedures. As a presentation, it characterizes a general structure to assist chiefs with thinking about store network interruptions and decide adjusted systems. In the first place it sets up a general survey of the conceivable answers for overseeing chance interruptions. It centers on the specific approach of dual sourcing and demonstrates that the real options idea is an adjusted device to assess such a procedure and builds up an expository model to investigate and esteem the advantages of depending on dual sourcing.

Keywords:

supply chains , flexibility , dual sourcing , real options , factor analysis