Evaluating the Resilience of Critical Infrastructures Assessing Interdependencies and Economic Impact: The Role of Inventories

The input-output approach proposed by Wassily Leontief is regarded as a key tool for the quantitative analysis of the interdependencies between different interconnected sectors within an economy, especially in today's highly interactive networks of producers/ service providers. In recent years, Leontief's model was also extended in order to assess their resilience to critical events, such as a disruption affecting some sectors and propagating through others according to their vulnerability, reaction times and centrality to the overall economy. In this context, a key factor towards the mitigation of monetary losses is represented by preparedness which, to a large extent, is associated with: (1) the availability of inventories; and (2) the ability to ensure extended continuity of product/service delivery in spite of the temporary, partial, or complete inoperability of some sectors. In this paper - building on an approach based on the dynamic inoperability input-output model with inventory (originally proposed in Barker and Santos 2010) - we formulate an optimization problem and propose an algorithm to determine how a proper sizing of each sector's cumulative inventory level can enhance the overall resilience to selected critical events.