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Trading reliability targets within a supply chain using Shapley's value

Quigley, J.L. and Walls, L.A. (2007) Trading reliability targets within a supply chain using Shapley's value. Reliability Engineering and System Safety, 92 (10). pp. 1448-1457. ISSN 0951-8320

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The development of complex systems involves a multi-tier supply chain, with each organisation allocated a reliability target for their sub-system or component part apportioned from system requirements. Agreements about targets are made early in the system lifecycle when considerable uncertainty exists about the design detail and potential failure modes. Hence resources required to achieve reliability are unpredictable. Some types of contracts provide incentives for organisations to negotiate targets so that system reliability requirements are met, but at minimum cost to the supply chain. This paper proposes a mechanism for deriving a fair price for trading reliability targets between suppliers using information gained about potential failure modes through development and the costs of activities required to generate such information. The approach is based upon Shapley's value and is illustrated through examples for a particular reliability growth model, and associated empirical cost model, developed for problems motivated by the aerospace industry. The paper aims to demonstrate the feasibility of the method and discuss how it could be extended to other reliability allocation models.

Item type: Article
ID code: 9555
Keywords: reliability allocation, reliability targets, supply chain, reliability growth model, pareto optimality, shapley value, Management. Industrial Management, Applied Mathematics, Industrial and Manufacturing Engineering, Safety, Risk, Reliability and Quality
Subjects: Social Sciences > Industries. Land use. Labor > Management. Industrial Management
Department: Strathclyde Business School > Management Science
Depositing user: Strathprints Administrator
Date Deposited: 20 Mar 2010 15:09
Last modified: 11 Dec 2015 20:08

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