Maximum flow simulations for business continuity planning in e-commerce during disasters

Abstract

The capacity of the distribution centers to process orders in an e-commerce business can be affected by many types of disasters, such as earthquakes, typhoons, global pandemics, etc., reducing the ability to deliver orders to the customers as quickly as possible. We built a network model simulator with each node representing a distribution center, in order to quantify the effect of damage to one of the centers on the shipment capacity, the backlog of orders and the lead time of the orders by solving for the maximum flow of the network. We compare multiple recovery scenarios with real data from ASKUL Corporation concerning the earthquake that struck Sendai in Japan on March 16^th 2022. We also propose a sub-node model to study the effect of damage inside a distribution center, as well as reduced capacity due to illness of personnel.