Hedging against disruptions with ripple effects in location analysis

Publication year: 2012
Source: Omega, Volume 40, Issue 1, January 2012, Pages 21-30

Federico, Liberatore , Maria P., Scaparra , Mark S., Daskin

Supply systems are subject to disruptions whose impact may not remain confined, but might actually propagate across the network. We consider the problem of optimally protecting a capacitated median system with a limited amount of protective resources subject to disruptions. Specifically, the type of disruption studied is characterized by correlation effects between the facilities, and may result in partial or complete disruption of the facilities involved. The model optimizes protection plans in the face of large area disruptions; i.e., disruptions that affect regions rather than single elements of the system. Examples may be earthquakes, storms, floods, fires, hurricanes, droughts, the…