System dynamics modeling of the earthquake-induced interruption of a business

ABSTRACT

This study proposes a system dynamics simulation model that characterizes the dynamics post-earthquake performance of a business considering its dependency on lifelines (i.e., utilities and road networks) and the state of the market. The model characterizes the relationships between the business’s profitability and the resources it needs to operate (e.g., staff, raw materials, and equipment). It also considers the supply and demand dynamics that govern the prices of goods or services the business produces. It can be used to holistically investigate a business’s post-earthquake performance and recovery. It helps administrators acquire an insight into how to reduce the vulnerability of their businesses against probable future earthquakes. The model application is showcased by applying it to simulate the post-earthquake performance and recovery of a manufacturing business. The results indicate that, unlike retrofits, post-earthquake measures like increasing prices or changing shipping policies do not adequately mitigate earthquake-induced business losses.

KEYWORDS:

• Resilience
• business interruption
• earthquake
• infrastructure
• system dynamics

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data Availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.

Notes

1. http://sina.sharif.ir/~hamed.kashani/supplementary/riskanalysismodels.pdf

2. http://sina.sharif.ir/~hamed.kashani/supplementary/sdmodeldetails.pdf

3. Toman is the currency of Iran

4. http://sina.sharif.ir/~hamed.kashani/supplementary/riskanalysismodels.pdf

Additional information

Notes on contributors

Negar Rezvany

Negar Rezvany completed her M.S at the Department of Civil Engineering at Sharif University of Technology, Tehran, Iran, researching the impacts of infrastructure failure on businesses for community resilience analysis. She is currently a Doctoral Assistant at École polytechnique fédérale de Lausanne, Switzerland. Her research interests include activity-based modeling, daily scheduling behavior, inter-household interactions, transportation, and energy demand.

Hamed Kashani

Hamed Kashani is an associate professor at Sharif University of Technology, Tehran, Iran, with the Department of Civil Engineering and the Center for Infrastructure Sustainability and Resilience Research (INSURER), of which he is a founding member. Dr. Kashani has published scholarly articles on modeling critical infrastructure systems and their interdependencies, the economic and socio-economic impact of natural disasters, investment evaluation of disaster risk mitigation measures, policy analysis for building stock vulnerability reduction, and disaster recovery.