A system dynamics model for assessing the ripple effect of intertwined supply networks

Deiva Ganesh Arumugam and Kalpana Pitchaimani

Journal of Simulation, 2025, vol. 19, issue 1, 24-38

Abstract: Supply chains (SC) are vulnerable due to the unprecedented environments. In addition, the subsequent risks derived from risk propagation are considered significant stressors. Therefore, it is essential to understand the dynamic nature of risks cascading across the SC nodes. Presently, the sudden interruption of semiconductor supply disrupts different SCs, and this would be an example of the negative impact due to sudden disruption. Given this, we attempt to analyze the ripple effect of an intertwined supply network using the system dynamics concept. The model aims to demonstrate the varying impacts of semiconductor shortages on different SCs. The results highlight the significant impact on automobile firms due to the demand surge in consumer electronics. The visual representation can help the researchers to understand the significance of stress testing for faster decision-making. Further investigation towards focusing the information distortion and coordination mechanisms can mitigate the disruption propagation due to demand volatility.

Date: 2025
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DOI: 10.1080/17477778.2024.2438115

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