A theoretical framework of risk compensation in supply chain management decision making

David M. Neyens, Linda Ng Boyle

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The goal of this study is to develop a theoretical framework for the study of decision makers within supply chains. Decision makers may compensate inappropriately by overstocking or overestimating lead times resulting in greater inventory costs. By leveraging the knowledge associated with risk compensation, better accountability of logistics and inventory holding costs can be achieved. Although there are conflicting views on risk compensation, the theory does provide insights into the complexities facing the decision maker in supply chain environments. More specifically, there has been relatively little research examining how human factors issues impact the supply chains' effectiveness. The risk compensation framework is tailored to represent and model the inventory management portion of the supply chain and can be validated through experimentation by evaluating the operator's perceived risks. In developing this model, the foundations for extending our knowledge of the human decision making in supply chain management can be established.

Original languageEnglish (US)
Title of host publicationProceedings of the Human Factors and Ergonomics Society 50th Annual Meeting, HFES 2006
PublisherHuman Factors and Ergonomics Society Inc.
Pages1488-1491
Number of pages4
ISBN (Print)9780945289296
DOIs
StatePublished - 2006
Event50th Annual Meeting of the Human Factors and Ergonomics Society, HFES 2006 - San Francisco, CA, United States
Duration: Oct 16 2006Oct 20 2006

Publication series

NameProceedings of the Human Factors and Ergonomics Society
ISSN (Print)1071-1813

Conference

Conference50th Annual Meeting of the Human Factors and Ergonomics Society, HFES 2006
Country/TerritoryUnited States
CitySan Francisco, CA
Period10/16/0610/20/06

ASJC Scopus subject areas

  • Human Factors and Ergonomics

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