The diverging control policy’s hand in supranational supply chain reconfiguration

Abstract

The efficiency of supranational supply chains is frequently compromised by divergent and evolving policies across countries. A novel assessment method for prolonged disruptive circumstances is presented, wherein supply chain performance is influenced by various mitigating control policies. The impact of control policies with concomitant labor productivity losses and perturbed delivery capabilities in supply chain networks is demonstrated through a detailed epidemic case study with diverging control approaches. First, a game-theoretic framework is employed through which the cost-optimal Nash equilibrium profile of diverging control strategies between countries is determined. Subsequently, cost-based strategic options for supply chain relocation are revealed through numerical simulations, providing guidance for entrepreneurial decision-making. The analysis is conducted on a realistically designed multiplex network that integrates a supply chain network layer with the case study’s epidemic SEIRD-diffusion layer. Two interconnected countries with distinct GDPs are examined as they implement Nash equilibrium policies for Epidemic Control Cost (ECC). These policies are characterized by strong versus weak confinement, and higher versus lower vaccine efficiency. Through this innovative methodology, an explanation of policymakers’ diverging mitigation policies and the potential decisions for supply chain relocation toward the comparatively better-protected region are elucidated, with consideration given to each region’s Cost from Relocation and supply chain capacity Loss (LRC).