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A risk-mitigation model driven from the level of forecastability of Black Swans: prepare and respond to major Earthquakes through a dynamic Temporal and Spatial Aggregation forecasting framework

Author

Listed:
  • Konstantinos Nikolopoulos

    (Bangor University)

  • Fotios Petropoulos

    (University of Bath)

  • Vasco Sanchez Rodrigues

    (Cardiff University)

  • Stephen Pettit

    (Cardiff University)

  • Anthony Beresford

    (Cardiff University)

Abstract

Major earthquakes are black swan, or quasi-random, events capable of disrupting supply chains to an entire country, region or even the whole world as the case of the Fukushima disaster profoundly demonstrated. They are amongst the most unpredictable types of natural disasters, and can have a severe impact on supply chains and distribution networks. This research develops a supply chain risk management model in the anticipation of such a black swan event. The research considers major earthquake data for the period 1985 – 2014, and temporal as well as spatial aggregation is undertaken. The aim is to identify the optimum grid size where forecasting variance is minimized and forecastability is maximized. Building on that a risk-mitigation model is developed. The dynamic model – updated every time a new event is added in the database - includes preparedness, responsiveness and centralization strategies for the different levels of time and geographical aggregation.

Suggested Citation

  • Konstantinos Nikolopoulos & Fotios Petropoulos & Vasco Sanchez Rodrigues & Stephen Pettit & Anthony Beresford, 2019. "A risk-mitigation model driven from the level of forecastability of Black Swans: prepare and respond to major Earthquakes through a dynamic Temporal and Spatial Aggregation forecasting framework," Working Papers 19017, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    • Handle: RePEc:bng:wpaper:19017
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    File URL: https://www.bangor.ac.uk/business/research/documents/BBSWP-19-17.pdf
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    References listed on IDEAS

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    Cited by:

    1. Nikolopoulos, Konstantinos, 2021. "We need to talk about intermittent demand forecasting," European Journal of Operational Research, Elsevier, vol. 291(2), pages 549-559.

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    More about this item

    Keywords

    Risk; Black Swans; Forecastability; Statistical Aggregation; Disaster Relief;
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