ABSTRACT
Economic shocks are unanticipated events that have widespread impact on an economy and can lead to supply chain disruptions that propagate from one region to another. The COVID-19 pandemic is a recent example. Simulations have been applied to study the impact of COVID-19 shocks on supply chains at the macro level using various approaches. This research has developed a hybrid System Dynamics and Input/Output simulation to model the economic impact of various types of supply chain disruptions. The hybrid model provides results that match historical performance of the U.S. economy under COVID-19 shocks and provides reasonable results when applied to investigate U.S. dependence on foreign trade. Its graphical nature also supports a decision support tool that will allow policymakers to explore the costs and benefits of various policy decisions designed to mitigate the impact of a broad set of potential supply chain disruptions. © 2022 IEEE.
ABSTRACT
Simulations incorporating economic input/output models have been applied recently to assess the extent of labor shocks from COVID 19 and their impact on supply chains at the macro level. Research is being done to extend these simulations for application to other scenarios of economic shocks beyond what was triggered through COVID related labor reductions. The problem of foreign supply chain dependency is of particular concern to localized regions as a significant portion of their economy is dependent on supplies from overseas. The extended simulation approach proposed here aims to optimize the degree to which the increased inventory supply targets allow for improved economic productivity and the ideal allocation per industry which most efficiently achieves this mitigation. This paper considers the application of the proposed simulation framework to study the regional dependence on the Asian supply chain. The case study presented in this paper demonstrates the economic insight that can be obtained through simulation analysis to support regional government decision making for the state of Alabama. © 2022 Society for Modeling & Simulation International (SCS)
ABSTRACT
Simulations incorporating economic input/output models have been applied recently to assess the extent of labor shocks from COVID 19 and their impact on supply chains at the macro level. Research is being done to extend these simulations for application to other scenarios of economic shocks beyond what was triggered through COVID related labor reductions. The problem of foreign supply chain dependency is of particular concern to localized regions as a significant portion of their economy is dependent on supplies from overseas. The extended simulation approach proposed here aims to optimize the degree to which the increased inventory supply targets allow for improved economic productivity and the ideal allocation per industry which most efficiently achieves this mitigation. This paper considers the application of the proposed simulation framework to study the regional dependence on the Asian supply chain. The case study presented in this paper demonstrates the economic insight that can be obtained through simulation analysis to support regional government decision making for the state of Alabama. © 2022 SCS.
ABSTRACT
This work examines the regional effects of COVID-19 supply chain shocks and potential inventory strategies to sustaining overall economic productivity through lockdowns. We introduce a multi-region extension to the economic production model proposed by Pichler, et al. [15] that was used to assess the extent of Covid-related shocks to gross output through modeling the interdependency between regional and national economies at the industry level. Our extended modeling approach aims to optimize, through genetic search, the degree to which the increased inventory supply targets allow for improved economic productivity and the ideal allocation per industry which most efficiently achieves this mitigation. The approach also integrates a new data regionalization procedure which we apply to a case study of the Alabama state economy. This application is shown to identify a set of major manufacturing and service sectors, where additional inventories enable greater sustained productivity across the Alabama region. This regional analysis of the Alabama economy highlighted the importance of sectors such as chemical, petroleum, food and beverage, and vehicle manufacturing and public administration, construction, management, transportation, and healthcare towards maintaining economic productivity. The ability to quantity regional production impacts from inventory allocations is leading to starting points for determining local government policies that target their most sensitive industries. © 2022 IEEE.