Regionalized Modeling of Supply Chain Resiliency for Analyzing Incentive Options

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.