This exploratory paper will investigate the concept of supply chain risk management involving supplier monitoring within a cooperative supply chain. Inventory levels and stockouts are the key metrics. Key to this concept is the assumptions that (1) out-of-control supplier situations are causal triggers for downstream supply chain disruptions, (2) these triggers can potentially be predicted using statistical process monitoring tools, and (3) carrying excess inventory only when needed is preferable as opposed to carrying excess inventory on a continual basis. Simulation experimentation will be used to explore several supplier monitoring strategies based on statistical runs tests, specifically "runs up and down" and/or "runs above and below" tests. The sensitivity of these tests in detecting non-random supplier behavior will be explored and their performance will be investigated relative to stock-outs and inventory levels. Finally, the effects of production capacity and yield rate will be examined. Results indicate out-of-control supplier signals can be detected beforehand and stock-outs can be significantly reduced by dynamically adjusting inventory levels. The largest benefit occurs when both runs tests are used together and when the supplier has sufficient production capacity to respond to downstream demand (i.e., safety stock) increases. When supplier capacity is limited, the highest benefit is achieved when yield rates are high and, thus, yield loss does not increase supplier production requirements beyond its available capacity.

The aversion dynamics research agenda has incorporated within dispatching heuristics a number of real-world observations involving risk mitigation practices used by real schedulers. One such observation is that schedulers occasionally offload risky jobs from a primary machine to otherwise less desirable machine (older, slower) during periods of peak load to avoid the effects the risky job can have on subsequent jobs. This paper examines this situation within the proportional parallel machine environment. Safety time is used to adjust dispatching priorities of risky jobs to reflect the aversion. The effect of various safety time values on performance is studied. Robust safety time values and/or intervals are identified across a variety of experimental factors related to risk level, percent risky jobs in the job stream, and due date distribution.