Operations Resilience & Continuity Lab

Supply Chain Risk & Disruption Calculator

Model Time-to-Recover (TTR), Time-to-Survive (TTS), Risk Exposure Index (REI), and buffer stock to mitigate supply chain disruption financial losses.

Disruption Engine TTR vs. Demand Matrix Resilience Theory FAQ

Disruption Presets

Load calibrated industry supply risk models.

Step 1: Demand Pace, Disruption Timeline, Buffer Stock & Mitigation Costs

Supply Chain Risk & Disruption Parameters

📦 Customer Demand & Economics

⏱️ Disruption Timeline (TTR vs. TTS)

🏭 Idle Overhead & Customer SLA Penalties

Risk Exposure Index (REI)
$2,975,000
Lost GP: $1.32M + Overhead/Penalties: $1.51M
Stockout Shortfall Days
41.3 Days
TTS (20d) vs TTR (75d) with 25% Dual-Source
Resilience Ratio (TTS / TTR)
27%
Vulnerable (55 Days Short)
Buffer Stock Holding Cost
$748,000/yr
Cost to hold 55 extra safety buffer days ($3.74M capital)

Supply Chain Risk Sensitivity Matrix: Total Financial Loss at Risk (REI)

Simulates total financial loss ($) across supplier disruption recovery durations (TTR: 15 to 90 days) and finished customer demand volume fluctuations.

Disruption TTR Tier -50% Demand -25% Demand Baseline Demand +25% Demand +50% Demand +100% Demand

MIT Supply Chain Resilience Framework

Understanding TTR, TTS & REI

Key concepts developed by MIT Professor David Simchi-Levi:

  • Time-to-Survive (TTS): The duration an enterprise can continue fulfilling customer orders after a supplier or facility is disrupted, determined by safety buffer stock and alternate suppliers.
  • Time-to-Recover (TTR): The total operational timeline required to restore a crippled supplier to full 100% output (including emergency tooling, re-qualification, and shipping ramp-up).
  • The Vulnerability Condition: If $ ext{TTS} < ext{TTR}$, a catastrophic stockout occurs. The goal of resilience engineering is ensuring $ ext{TTS} ge ext{TTR}$ for all single-source nodes.
  • Risk Exposure Index (REI): Quantifies the total dollar impact of disruption (lost gross profit, unabsorbed idle overhead, SLA contractual penalties, and expedited logistics).

Evaluate lot sizing in the EPQ Production Lab.

Mathematical Formulation

Supply chain risk equations

Time_to_Survive (TTS) = Inventory_Buffer_Days

Unmitigated_Days = max( 0, TTR - TTS )

Effective_Shortfall_Days = Unmitigated_Days × ( 1 - Dual_Sourcing_% )

Lost_Gross_Profit = Effective_Shortfall_Days × Daily_Gross_Profit

Risk_Exposure_Index (REI) = Lost_GP + Total_Idle_Overhead + SLA_Penalties + Expedited_Freight

Buffer_Holding_Cost = Additional_Buffer_Units × Unit_Cost × Annual_Holding_Cost_%

Model single-period demand risk in the Newsvendor Lab.

FAQ

Supply chain risk & disruption questions

What is the difference between Time-to-Recover (TTR) and Time-to-Survive (TTS)?

Developed by Prof. David Simchi-Levi at MIT, Time-to-Recover (TTR) is the time required for a disabled supplier, port, or facility to restore 100% full capacity. Time-to-Survive (TTS) is the maximum duration a business can satisfy customer demand using existing buffer stock, WIP, and alternate suppliers without stockout disruption.

What is the Risk Exposure Index (REI)?

The Risk Exposure Index (REI) represents the total financial loss (lost gross margin, unabsorbed plant idle overhead, customer SLA penalties, and emergency expedited freight) incurred when a supply chain node is disrupted for its full TTR.

How does dual-sourcing mitigate supply chain disruption risk?

Dual-sourcing maintains a qualified secondary supplier that can immediately ramp up production, reducing the daily stockout shortfall percentage and dramatically lowering the overall financial Risk Exposure Index.

How do you evaluate the cost of holding safety inventory versus disruption loss?

Holding safety stock incurs annual inventory carrying costs (cost of capital, storage, obsolescence, typically 18%-25%/yr). This annual holding cost is compared against the expected annual probability of disruption multiplied by the total REI loss.

Can I export the supply chain disruption exposure audit to CSV?

Yes. You can export complete TTS/TTR metrics, lost gross margin, idle overhead, SLA penalties, and 6x6 disruption sensitivity matrices as a UTF-8 CSV spreadsheet with formula defense.

Continue Exploring Operations & Risk Tools

Explore our Risk & Resilience Hub, model single-period inventory risks in the Newsvendor Lab, evaluate multi-criteria inventory in the ABC-XYZ Inventory Lab, stress-test business continuity in the Business Continuity Lab, or quantify credit risk in the Credit Risk Lab.