Robust global supply chain reconfiguration under tariff and geopolitical uncertainty

Global supply chains are increasingly exposed to trade policy shocks and physical disruptions arising from common geopolitical events. We develop a robust optimization framework with two decision stages for strategic supply chain reconfiguration. Supplier qualification and transportation arc activation decisions are made before uncertainty is realized, while operational flows adapt afterward. Geopolitical uncertainty is represented through country level shocks that can jointly trigger tariff escalation, policy induced restrictions on cross border capacity, facility disruptions, and physical transportation failures. The resulting min max min problem is reformulated by dualizing the operational recourse problem, yielding a nonconvex mixed integer bilinear adversarial problem solved within a column and constraint generation procedure. Comparison with complete enumeration verifies the implementation on small instances, while experiments on 60 synthetic supply chain networks of varying sizes assess computational performance. The results show that omitting geopolitical transmission channels during strategic design can lead to substantial deterioration in cost and service under full geopolitical stress. Broader protection is achieved primarily through changes in transportation network configuration rather than increased supplier qualification. Robust performance also depends on the severity and composition of geopolitical consequences, with restrictions on cross border capacity exerting a stronger effect than comparable proportional changes in tariff severity over the tested ranges. A geographically grounded case analysis further shows that the value of individual uncertainty channels depends on network structure and geographic exposure.

Authors

Publication Details

Journal
arXiv (Cornell University)
Published
2026-10-27
DOI
https://doi.org/10.48550/arxiv.2610.36977
Primary Topic
Supply Chain Resilience and Risk Management
Type
preprint
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preprint

Robust global supply chain reconfiguration under tariff and geopolitical uncertainty

Ashish Chandra
1 links
arXiv (Cornell University)
Supply Chain Resilience and Risk Management
preprint

Robust global supply chain reconfiguration under tariff and geopolitical uncertainty

Ashish Chandra
preprint en

Abstract

Global supply chains are increasingly exposed to trade policy shocks and physical disruptions arising from common geopolitical events. We develop a robust optimization framework with two decision stages for strategic supply chain reconfiguration. Supplier qualification and transportation arc activation decisions are made before uncertainty is realized, while operational flows adapt afterward. Geopolitical uncertainty is represented through country level shocks that can jointly trigger tariff escalation, policy induced restrictions on cross border capacity, facility disruptions, and physical transportation failures. The resulting min max min problem is reformulated by dualizing the operational recourse problem, yielding a nonconvex mixed integer bilinear adversarial problem solved within a column and constraint generation procedure. Comparison with complete enumeration verifies the implementation on small instances, while experiments on 60 synthetic supply chain networks of varying sizes assess computational performance. The results show that omitting geopolitical transmission channels during strategic design can lead to substantial deterioration in cost and service under full geopolitical stress. Broader protection is achieved primarily through changes in transportation network configuration rather than increased supplier qualification. Robust performance also depends on the severity and composition of geopolitical consequences, with restrictions on cross border capacity exerting a stronger effect than comparable proportional changes in tariff severity over the tested ranges. A geographically grounded case analysis further shows that the value of individual uncertainty channels depends on network structure and geographic exposure.

arXiv (Cornell University)
Supply Chain Resilience and Risk Management
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Robust global supply chain reconfiguration under tariff and geopolitical uncertainty — Ashish Chandra · arXiv (Cornell University) (2026) | TGRS Research Map | TGRS