Mathematical Modelling of Risk Management in the Shipping Industry

Supply chain risk management (SCRM) is primarily a process of systematic identifying, assessing, and mitigating risks within supply chain systems. Despite its complexity and criticality, the offshore and marine industry, particularly the rig-building segment has received limited attention in SCRM literature. This study centers on managing risks in oil rig building projects. A structured risk mitigation framework is proposed to comprehensively identify potential risks, filter out minor ones, and prioritize the remaining based on their impact. A mathematical model is then developed to analyze one of the most significant risks: raw material price fluctuation. To quantify this risk, Monte Carlo simulation is applied using the Risk Solver platform. The study presents two case scenarios demonstrating the implementation of various risk management strategies and evaluates their effectiveness in enhancing the resilience of the rig-building supply chain.