Due to global outsourcing, supply chain system has become more complex and has faced high risks and disruptions. Many of the disruptions can occur at any time or any stage in the supply chain. Nowadays, businesses and industries are losing effort and money due to those disruptions. As a prescription to improve quality, effectiveness, and profitability of the supply chain, companies would like to measure and optimize the reliability of the entire supply chain system. In addition, companies are interested in minimizing the cost of processes throughout the supply chain system. This thesis provides a pathway that measures the reliability rate of each component involved in the system as well as for the overall supply chain. Furthermore, the study illustrates an optimization model that helps to improve the reliability of the supply chain system with taking the cost indication into account in order to fulfill the reliability requirements and reach minimum cost. Results and findings of this thesis confirm that the presented mathematical model can be applied to improve the supply chain system and the system can be improved to reach a designed reliability target. This methodology can be a guide to developing supply chain system planning with decreased costs