Research on ordering strategy of company D under supply disruption of COVID-19

Shanghai Normal University Tianhua College, Business School, Shanghai, China

^* Corresponding author: dxk2420@sthu.edu.cn

Abstract

With deepening of economic globalization and prevalence of lean production, market competition has intensified and uncertain risk factors in the cross-supply-demand relationship have increased, thus the supply chain has become much more fragile. Force majeure risks such as natural disasters, epidemics, and traffic accidents further expand the scope and losses of supply disruption. In 2019 the outbreak of COVID-19 pandemic has devastated global supply chains and lead to many companies facing the risk of supply disruptions. Based on the comprehensive analysis of relevant research status, this paper investigates the current situation and existing procurement problems of company D under the risk of supply interruption in the COVID-19 pandemic, and analyzes the procurement strategy response in combination with the actual situation of company D. It combines newsvendor model and the capability option model to analyze the ordering decision of company D and enrich the research on the ordering strategy under supply disruption. The purpose of this paper is to provide company D with scientific procurement advice under supply disruption, and provide a reasonable reference for enterprises in the same industry.