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Attracting international migrant labor: Investment optimization to alleviate supply chain labor shortages

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  • Nagurney, Anna

Abstract

The COVID-19 pandemic has disrupted supply chains globally with a major shortfall being that of labor shortages from production through distribution activities. In this paper, we construct a new supply chain network optimization model that includes both domestic labor and international migrant labor from multiple countries, with the latter made possible through investments in attracting labor subject to a budget constraint. We allow for different wage settings for domestic versus migrant labor and also have the flexibility of providing true information as to the wages of migrants or not. We derive variational inequality formulations of the model, along with qualitative properties, and present an algorithm that yields closed form expressions for the underlying problem variables at each iteration. The model is one of the very few variational inequality operations research models with nonlinear constraints. Three series of algorithmically solved numerical examples, motivated by a high value agricultural product — that of truffles, demonstrate the insights in terms of profits, prices, product path flows, and investments, with variations in the data including that of truthful and untruthful wages being used to attract migrant labor.

Suggested Citation

  • Nagurney, Anna, 2022. "Attracting international migrant labor: Investment optimization to alleviate supply chain labor shortages," Operations Research Perspectives, Elsevier, vol. 9(C).
    • Handle: RePEc:eee:oprepe:v:9:y:2022:i:c:s2214716022000100
    DOI: 10.1016/j.orp.2022.100233
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    References listed on IDEAS

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    1. Anna Nagurney, 2021. "Perishable Food Supply Chain Networks with Labor in the Covid-19 Pandemic," Springer Optimization and Its Applications, in: Ilias S. Kotsireas & Anna Nagurney & Panos M. Pardalos & Arsenios Tsokas (ed.), Dynamics of Disasters, pages 173-193, Springer.
    2. Kalashnikov, Vyacheslav & Kalashnykova, Nataliya & Rojas, Ramón Luévanos & Muí±os, Mario Méndez & Uranga, César & Rojas, Arnulfo Luévanos, 2008. "Numerical experimentation with a human migration model," European Journal of Operational Research, Elsevier, vol. 189(1), pages 208-229, August.
    3. Anna Nagurney, 2022. "Labor and Supply Chain Networks," Springer Optimization and Its Applications, Springer, number 978-3-031-20855-3, June.
    4. Genevieve LeBaron, 2021. "The Role of Supply Chains in the Global Business of Forced Labour," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(2), pages 29-42, April.
    5. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 2020. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 94-137.
    6. ManMohan S. Sodhi & Christopher S. Tang, 2021. "Supply Chain Management for Extreme Conditions: Research Opportunities," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(1), pages 7-16, January.
    7. Anna Nagurney, 2021. "A Multiperiod Supply Chain Network Optimization Model with Investments in Labor Productivity Enhancements in an Era of COVID-19 and Climate Change," SN Operations Research Forum, Springer, vol. 2(4), pages 1-22, December.
    8. Anna Nagurney & Patrizia Daniele & Shivani Shukla, 2017. "A supply chain network game theory model of cybersecurity investments with nonlinear budget constraints," Annals of Operations Research, Springer, vol. 248(1), pages 405-427, January.
    9. Chowdhury, Priyabrata & Paul, Sanjoy Kumar & Kaisar, Shahriar & Moktadir, Md. Abdul, 2021. "COVID-19 pandemic related supply chain studies: A systematic review," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    10. Nagurney, Anna, 2021. "Optimization of supply chain networks with inclusion of labor: Applications to COVID-19 pandemic disruptions," International Journal of Production Economics, Elsevier, vol. 235(C).
    11. A. Causa & B. Jadamba & F. Raciti, 2017. "A migration equilibrium model with uncertain data and movement costs," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 40(1), pages 159-175, November.
    12. Nagurney, Anna & Pan, Jie & Zhao, Lan, 1992. "Human migration networks," European Journal of Operational Research, Elsevier, vol. 59(2), pages 262-274, June.
    13. Nagurney, Anna, 2021. "Supply chain game theory network modeling under labor constraints: Applications to the Covid-19 pandemic," European Journal of Operational Research, Elsevier, vol. 293(3), pages 880-891.
    14. Konrad, Renata A. & Trapp, Andrew C. & Palmbach, Timothy M. & Blom, Jeffrey S., 2017. "Overcoming human trafficking via operations research and analytics: Opportunities for methods, models, and applications," European Journal of Operational Research, Elsevier, vol. 259(2), pages 733-745.
    15. Nagurney, Anna & Daniele, Patrizia, 2021. "International human migration networks under regulations," European Journal of Operational Research, Elsevier, vol. 291(3), pages 894-905.
    16. Anna Nagurney & Patrizia Daniele & Giorgia Cappello, 2021. "Capacitated Human Migration Networks and Subsidization," Springer Optimization and Its Applications, in: Ilias S. Kotsireas & Anna Nagurney & Panos M. Pardalos & Arsenios Tsokas (ed.), Dynamics of Disasters, pages 195-217, Springer.
    17. Nagurney, Anna & Salarpour, Mojtaba & Daniele, Patrizia, 2019. "An integrated financial and logistical game theory model for humanitarian organizations with purchasing costs, multiple freight service providers, and budget, capacity, and demand constraints," International Journal of Production Economics, Elsevier, vol. 212(C), pages 212-226.
    18. Anna Nagurney & Patrizia Daniele & Ladimer S. Nagurney, 2020. "Refugee migration networks and regulations: a multiclass, multipath variational inequality framework," Journal of Global Optimization, Springer, vol. 78(3), pages 627-649, November.
    19. Ivanov, Dmitry, 2020. "Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    20. Toyasaki, Fuminori & Daniele, Patrizia & Wakolbinger, Tina, 2014. "A variational inequality formulation of equilibrium models for end-of-life products with nonlinear constraints," European Journal of Operational Research, Elsevier, vol. 236(1), pages 340-350.
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