Modeling and mitigating the effects of supply chain disruption in a defender–attacker game

Jie Xu, Jun Zhuang () and Zigeng Liu
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Jie Xu: SUNY at Buffalo
Zigeng Liu: Northwestern University

Annals of Operations Research, 2016, vol. 236, issue 1, No 13, 255-270

Abstract: Abstract The outcomes of a defender–attacker game depend on the defender’s resources delivered through military supply chains. These are subject to disruptions from various sources, such as natural disasters, social disasters, and terrorism. The attacker and defender are at war; the defender needs resources to defeat the attacker, but those resources may not be available due to a supply chain disruption that occurs exogenously to the game. In this paper, we integrate a defender–attacker game with supply chain risk management, and study the defender’s optimal preparation strategy. We provide analytical solutions, conduct numerical analysis, and compare the combined strategy with other protection strategies. Our results indicate that: (a) the defender benefits in a defender–attacker game by utilizing supply chain risk management tools; and (b) the attacker’s best response resource allocation would not be deterred by capacity backup protection and/or inventory protection. The feature of this paper is that the defender, being the downstream user of the supply chain, is involved in a strategic contest against the attacker. This model is different than game theory applied to private-sector supply chains because most game theoretic models of private sector supply chains usually explore relationships between suppliers and firms in the same supply chain or between multiple firms competing in the marketplace for customers. Therefore, supply chain risk management for such a military application imposes effects that have not been studied before.

Keywords: Supply chain disruption; Defender–attacker game; Pre-disruption protection (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s10479-015-1810-z

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