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

Research output: Contribution to journalArticle

27 Citations (Scopus)

Abstract

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.
LanguageEnglish
Pages1448-1457
Number of pages9
JournalReliability Engineering and System Safety
Volume92
Issue number10
DOIs
Publication statusPublished - Oct 2007

Fingerprint

Shapley Value
Supply Chain
Supply chains
Target
Failure Mode
Reliability Growth
Failure modes
Empirical Model
Cost Model
Requirements
Costs
System Reliability
Growth Model
Incentives
Life Cycle
Complex Systems
Subsystem
Aerospace industry
Industry
Uncertainty

Keywords

  • reliability allocation
  • reliability targets
  • supply chain
  • reliability growth model
  • pareto optimality
  • shapley value

Cite this

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Trading reliability targets within a supply chain using Shapley's value. / Quigley, J.L.; Walls, L.A.

In: Reliability Engineering and System Safety, Vol. 92, No. 10, 10.2007, p. 1448-1457.

Research output: Contribution to journalArticle

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