Assessing the Usefulness of the Effect-oriented Supply Chain Risk Management Approach in a High Impact Low Frequency Environment

The paper shows that the effect-oriented Probable Maximum Loss model requires a general consensus on the disruption time before it may improve the assessment of disruptions in an uncertainty  environment. Given that this condition is met, themodel can improve the process of assessing supplier exposure of disruptions by increasing the speed and precision of analysis. However certain und uerstanding issues remain, e.g. probabilistic measures are necessary, costs of risk mitigation are required, managerial incentives for supply chain managers must be aligned with the risk mitigation agenda, and heuristic biases must be understood.