Resilience assessment of the downstream oil supply chain considering the inventory strategy in extreme weather events

As climate change intensifies and extreme weather events occur more frequently, the uncertainties of demand, production and inventory will affect the operation and management of supply chains. In this paper, a systematic method for evaluating the resilience of the supply chain is proposed, which is applied to the demand side management of an actual downstream oil supply chain. According to the practical operation of the downstream oil supply chain, several scenarios such as disruption of refineries, shutdown of pipelines and increasing demand are defined. Then, two indices are introduced to make a quantitative resilience assessment for the studied downstream oil supply chain. The inventory strategy is also proposed and applied to different scenarios. Finally, Monte Carlo simulation is used to make a comprehensive analysis with multiple scenarios. The results show that increasing the inventory of storage depots can improve the resilience of the supply chain by 2.67% to 14.83%. According to the sensitivity analysis for the failure rate and repair rate of each link, it is indicated that the resilience can be improved by 5.95% when the repair rate is doubled and be reduced to 16.04% when the repair rate is reduced by half.(c) 2022 Elsevier Ltd. All rights reserved.

Automated summary

This paper proposes a method for evaluating the resilience of supply chains and applies it to demand management in the downstream oil supply chain. Through quantitative analysis and Monte Carlo simulation of multiple scenarios, it is concluded that increasing inventory and improving repair rates can enhance the resilience of the supply chain.