Effects of trust-based decision making in disrupted supply chains

The United States has experienced prolonged severe shortages of vital medications over the past two decades. The causes underlying the severity and prolongation of these shortages are complex, in part due to the complexity of the underlying supply chain networks, which involve supplier-buyer interactions across multiple entities with competitive and cooperative goals. This leads to interesting challenges in maintaining consistent interactions and trust among the entities. Furthermore, disruptions in supply chains influence trust by inducing over-reactive behaviors across the network, thereby impacting the ability to consistently meet the resulting fluctuating demand. To explore these issues, we model a pharmaceutical supply chain with boundedly rational artificial decision makers capable of reasoning about the motivations and behaviors of others. We use multiagent simulations where each agent represents a key decision maker in a pharmaceutical supply chain. The agents possess a Theory-of-Mind capability to reason about the beliefs, and past and future behaviors of other agents, which allows them to assess other agents’ trustworthiness. Further, each agent has beliefs about others’ perceptions of its own trustworthiness that, in turn, impact its behavior. Our experiments reveal several counter-intuitive results showing how small, local disruptions can have cascading global consequences that persist over time. For example, a buyer, to protect itself from disruptions, may dynamically shift to ordering from suppliers with a higher perceived trustworthiness, while the supplier may prefer buyers with more stable ordering behavior. This asymmetry can put the trust-sensitive buyer at a disadvantage during shortages. Further, we demonstrate how the timing and scale of disruptions interact with a buyer’s sensitivity to trustworthiness. This interaction can engender different behaviors and impact the overall supply chain performance, either prolonging and exacerbating even small local disruptions, or mitigating a disruption’s effects. Additionally, we discuss the implications of these results for supply chain operations

Minimization of Drug Shortages in Pharmaceutical Supply Chains: A Simulation-Based Analysis of Drug Recall Patterns and Inventory Policies

The drug shortage crisis in the last decade not only increased health care costs but also jeopardized patients’ health across the United States. Ensuring that any drug is available to patients at health care centers is a problem that official health care administrators and other stakeholders of supply chains continue to face. Furthermore, managing pharmaceutical supply chains is very complex, as inevitable disruptions occur in these supply chains (exogenous factors), which are then followed by decisions members make after such disruptions (internal factors). Disruptions may occur due to increased demand, a product recall, or a manufacturer disruption, among which product recalls—which happens frequently in pharmaceutical supply chains—are least studied. We employ a mathematical simulation model to examine the effects of product recalls considering different disruption profiles, e.g., the propagation in time and space, and the interactions of decision makers on drug shortages to ascertain how these shortages can be mitigated by changing inventory policy decisions. We also measure the effects of different policy approaches on supply chain disruptions, using two performance measures: inventory levels and shortages of products at health care centers. We then analyze the results using an approach similar to data envelopment analysis to characterize the efficient frontier (best inventory policies) for varying cost ratios of the two performance measures as they correspond to the different disruption patterns. This analysis provides insights into the consequences of choosing an inappropriate inventory policy when disruptions take place

Minimization of Drug Shortages in Pharmaceutical Supply Chains: A Simulation-Based Analysis of Drug Recall Patterns and Inventory Policies

The drug shortage crisis in the last decade not only increased health care costs but also jeopardized patients’ health across the United States. Ensuring that any drug is available to patients at health care centers is a problem that official health care administrators and other stakeholders of supply chains continue to face. Furthermore, managing pharmaceutical supply chains is very complex, as inevitable disruptions occur in these supply chains (exogenous factors), which are then followed by decisions members make after such disruptions (internal factors). Disruptions may occur due to increased demand, a product recall, or a manufacturer disruption, among which product recalls—which happens frequently in pharmaceutical supply chains—are least studied. We employ a mathematical simulation model to examine the effects of product recalls considering different disruption profiles, e.g., the propagation in time and space, and the interactions of decision makers on drug shortages to ascertain how these shortages can be mitigated by changing inventory policy decisions. We also measure the effects of different policy approaches on supply chain disruptions, using two performance measures: inventory levels and shortages of products at health care centers. We then analyze the results using an approach similar to data envelopment analysis to characterize the efficient frontier (best inventory policies) for varying cost ratios of the two performance measures as they correspond to the different disruption patterns. This analysis provides insights into the consequences of choosing an inappropriate inventory policy when disruptions take place

Introducing Gamettes: A Playful Approach for Capturing Decision-Making for Informing Behavioral Models

Agent-based simulations are widely used for modeling human behavior in various contexts. However, such simulations may oversimplify human decision-making. We propose the use of Gamettes to extract rich data on human decision-making and help in improving the human behavioral aspects of models underlying agent-based simulations. We show how Gamettes are designed and provide empirical validation for using Gamettes in an experimental supply chain setting to study human decision-making. Our results show that Gamettes are successful in capturing the expected behaviors and patterns in supply chain decisions, and, thus, we find evidence for the capability of Gamettes to inform behavioral models

An Integrated Simulation Framework for Examining Resiliency in Pharmaceutical Supply Chains Considering Human Behaviors

The growing epidemic of drug shortages in the United States causes challenges for providers all across the critical health care infrastructure and demonstrates the lack of resiliency within drug delivery supply chains. With many drugs having no acceptable substitute, drug shortages directly translate to a public health and safety risk. One of the understudied elements driving this crisis is the role of human behavior and human decision making across the supply chain echelons. We propose an integrated simulation framework which allows for instantiating, testing, and improving supply chains when accounting for human components of the system. We demonstrate the potential insights that can be obtained with our method through several experiments in which supply chain decision makers account for how others might react to their decisions