Abstract: The design of threelevel supply network of substitute raw materials under supply failure risk was researched， given that the supply network might fail due to the external disruptions. On the premise of ensuring the resilience of the supply network， a mixed integer programming model was built up and the solution was given by using the optimal software CPLEX so as to minimize the expectation cost of the supply network. The effect of substitute of raw materials on the supply network under supply failure risk was examined with the computational experiments. The results showed that the substitution can always reduce the operating costs of supply networks， and the suppliers that can provide two kinds of raw materials at one time have an edge over those that can supply only one kind.

Key words: supply failure risk, substitution, supply network, resilient network, optimization design