Assessing the Benefits of the Product Postponement Strategy to Mitigate Supply Chain Risks: A Real Options-Based Computational Model

The purpose of this paper is to develop a model for the quantification of the costs and benefits associated to a specific supply chain risk management strategy, namely the product postponement strategy (PP). To do this we adopt a real option-based approach and apply the model to a numerical example. The application will show the usefulness of the model in supporting the managers' decision making process on assessing the probabilistic advantages of adopting the PP in risky environments, specifically under conditions of demand and supply disruption.