Tempur Sealy International faces a complex supply chain investment challenge: how to allocate riskmitigation resources across inventory, sourcing, production, and logistics while preserving high customer service levels for its premium Tempur-Pedic mattress portfolio. This study investigates how different types of disruptions can cause service-level declines and how the company should prioritize risk-mitigation investments across its end-to-end network. To address this problem, we developed a multi-period Mixed- Integer Linear Programming model of the logistics network in the U.S., tested it under plant shutdown and supplier disruption scenarios, and complemented it with targeted trade-off analyses of alternative inventory strategies to assess their impacts on financial metrics. The results indicate that finished goods inventory serves as the most effective and broadly applicable lever for maintaining service levels across both production-side and supplier-side disruptions. A 20% increase in finished goods inventory is 1.4 times more effective at mitigating lost sales than an equivalent increase in raw materials inventory. Additionally, the analysis suggests that plant outages can often be mitigated through network flexibility, rather than immediate service-level reduction. Based on these findings, we propose a prioritized set of five riskmitigation investments: (1) increasing or at least maintaining current finished goods inventory, (2) implementing added buffers for critical raw materials, (3) enhancing outbound logistics flexibility across distribution centers, (4) improving inbound logistics flexibility for raw material flows, and (5) expanding production flexibility to enable all plants to manufacture the full product portfolio strategically. Collectively, these recommendations provide a structured roadmap for strengthening supply chain resilience by making the most effective investments.
