Preparing for the Unexpected: Shock Modeling & Supply Chain Security

We create virtual scenarios or models (sometimes referred to as "shock modeling") that mimic real-world events such as natural disasters, trade restrictions, or transportation delays. By simulating these disruptions, MITRE helps sponsors assess national-level supply chain vulnerabilities, including identifying critical points of failure and developing strategies to minimize the impact of potential disruptions.

Our framework is powered by quantitative simulation models that assess the impact of economic shocks and their impact on supply chains at the macro level. These interactions capture the flow of inventory, demand, orders, and intermediate consumptions, as well as labor and industry production on a day-by-day basis, and allow for a variety of shocks to be invoked into a simulation experiment. Metrics outputted from the simulation relate to production and gross output per industry in the United States and can be observed in terms of cumulative gross output loss, maximum loss in gross output, and time to recover.

This simulation framework also incorporates optimization procedures to explore the space of inventory allocation alternatives that best maximize different types of resiliency measures. Additional models are then developed to produce a more complete simulation framework for wider ranging applications. A lighter weight System Dynamics model provides a more transparent interface to enable policymakers to isolate significant connections between variables of interest. Successful case studies involving labor shocks, transportation delays, and other disruptions have already been performed with a number of sponsors.