The impact of uncertain environment on rice supply chain performance in northeast Thailand

Rice is a key agricultural product of Thailand and plays a vital role in the Thai economy. Rice production, however, is dependent upon environmental factors. Environmental uncertainty therefore, can impact rice crop areas in term of influencing the rice yield, rice production and generating ripple effects along the overall rice supply chain. The aim of this research is to investigate the effects of uncertain rice supply caused by drought years on the rice supply chain performance in Thailand. Three stochastic simulation models in different assumptions of rough rice production situations were developed which were based on historical data of normal and drought years in northeast Thailand. The results from using iThink software indicate that periodic enormous rice production loss because of a drought year create significant problems such as fluctuating inventory levels, stock-outs and unfilled customer demand compared to rice production loss under monsoon drought probability and mean rice production.