Simulating the impact of inventory on supply chain resilience with an algorithmic process based on the supply-side dynamic inoperability input–output model

Abstract

ABSTRACTThe interdependent nature of highly interconnected systems, such as supply chains, renders them incapable of quickly resuming operation following a disruptive event. In the context of supply chains, previous works have demonstrated the efficacy of inventory as a mitigation strategy to delay the impact of disruptive events. However, current methods tend to focus only on a demand-driven approach, which may be inappropriate for some systems where a value-added price perturbation represents an impact. Thus, this paper offers a methodology for understanding the role of inventory in the supply-side dynamic inoperability input–output model (DIIM). To demonstrate the applicability of the proposed model, an illustrative example is presented using data from the 2012 Philippines Input–Output (I-O) Table in five different scenarios. Given a predefined planning horizon, the results of this work can serve as guidelines for decision-makers for the provision of inventory that will keep the overall inoperability of an entire supply chain at a minimum.