A System Dynamics Model for Studying the Resiliency of Supply Chains and Informing Mitigation Policies for Responding to Disruptions

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.