Research on risk spread model of industrial chain

Abstract

Purpose

The industrial chain network is a complex system consisted by many members of the enterprise, and the complex relationship and the interaction with the external environment among the node enterprises and the existence of various uncertainty all increase the risk of the industry chain. The risk of some individual node enterprises will not only affect the normal operation but also spread the risk to other enterprises by network relationship because of their own mismanagement or deterioration of the external environment. The purpose of this paper is to make an attempt to establish the risk spread model of the industrial chain based on complex networks.

Design/methodology/approach

By improving Lobos disaster diffuse model, the paper introduces two indexes: the risk spread range and the risk propagation velocity to measure of industrial chain risk communication effects, and design algorithm for industrial chain complex network structure. The risk spread range can be used to measure the coverage of the risk communication influence produced by the propagation enterprises in the industry chain and to analyse the risk spread breadth on the industrial chain network .The speed index of risk communication represents the total numbers of infection enterprises in unit simulation time.

Findings

This paper proposes the universal industrial chain risk propagation model.

Originality/value

Through proposed algorithm constructs industrial chain network, and enterprise class divide, the importance of the product chain enterprises in the industry chain is strengthened.

Citation

Chu, Y. and Dai, M.-M. (2014), "Research on risk spread model of industrial chain", Grey Systems: Theory and Application, Vol. 4 No. 2, pp. 328-338. https://doi.org/10.1108/GS-05-2014-0014