A Dynamic Network Flow Model for Interdependent Infrastructure and Supply Chain Networks with Uncertain Asset Operability
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In globally integrated supply chain networks, initially local disruptions can quickly escalate to major problems due to complex interdependencies and cascading failure. This paper is particularly concerned with the role of infrastructure failure causing or exacerbating such cascading effects in supply chain networks. To improve the understanding of infrastructure and supply chain interdependency, we propose a novel modelling approach that captures the dynamics of both asset operability and network flows. The method uses a Markov process to generate operability scenarios and a multistage stochastic linear program to assign dynamic flows and optimise network capacities. The model takes into account different mechanisms of cascading failure, namely failure propagation, delay of recovery and unavailability of production inputs. A numeric example demonstrates how the method can be used to assess and optimises the resilience of a global supply chain against multiple hazards and infrastructure failure.
KeywordsSupply chain resilience Interdependency Network flow modelling
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