A Robust Supply Chain Model for a National Economy with Many Goods, Multiple Import Routes, and Compulsory Stockpiling

Abstract

Import routes are vital for the provision of good required for food, consumption and production. An economy can be interpreted as a large-scale supply chain that must manage import disruption risk. Therefore, emergency scenarios have to be anticipated. In this chapter, I model such a supply chain by focusing on the resilience to import disruption. The model also considers compulsory stockpiling. I suggest cost-saving strategies obtained from a scalable model that simulates multiple suppliers, and I model disruption risk by specifying threat scenarios with different disruption probabilities. An illustrative application of the model to the national economy of Switzerland demonstrates that significant cost savings can be achieved if disruption risk is assessed properly.