Effects of trust-based decision making in disrupted supply chains

Doroudi, R., Sequeira, P., Marsella, S. , Ergun, O., Azghandi, R., Kaeli, D., Sun, Y. and Griffin, J. (2020) Effects of trust-based decision making in disrupted supply chains. PLoS ONE, 15(2), e0224761. (doi: 10.1371/journal.pone.0224761) (PMID:32069295) (PMCID:PMC7028279)

Abstract

The United States has experienced prolonged severe shortages of vital medications over the past two decades. The causes underlying the severity and prolongation of these shortages are complex, in part due to the complexity of the underlying supply chain networks, which involve supplier-buyer interactions across multiple entities with competitive and cooperative goals. This leads to interesting challenges in maintaining consistent interactions and trust among the entities. Furthermore, disruptions in supply chains influence trust by inducing over-reactive behaviors across the network, thereby impacting the ability to consistently meet the resulting fluctuating demand. To explore these issues, we model a pharmaceutical supply chain with boundedly rational artificial decision makers capable of reasoning about the motivations and behaviors of others. We use multiagent simulations where each agent represents a key decision maker in a pharmaceutical supply chain. The agents possess a Theory-of-Mind capability to reason about the beliefs, and past and future behaviors of other agents, which allows them to assess other agents’ trustworthiness. Further, each agent has beliefs about others’ perceptions of its own trustworthiness that, in turn, impact its behavior. Our experiments reveal several counter-intuitive results showing how small, local disruptions can have cascading global consequences that persist over time. For example, a buyer, to protect itself from disruptions, may dynamically shift to ordering from suppliers with a higher perceived trustworthiness, while the supplier may prefer buyers with more stable ordering behavior. This asymmetry can put the trust-sensitive buyer at a disadvantage during shortages. Further, we demonstrate how the timing and scale of disruptions interact with a buyer’s sensitivity to trustworthiness. This interaction can engender different behaviors and impact the overall supply chain performance, either prolonging and exacerbating even small local disruptions, or mitigating a disruption’s effects. Additionally, we discuss the implications of these results for supply chain operations.

• Item Type: Articles
• Additional Information: This work is supported by the National Science Foundation under grant CMMI 1638302 to JG.
• Keywords: Research article, biology and life sciences, social sciences, research and analysis methods, computer and information sciences, physical sciences, medicine and health sciences.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Marsella, Professor Stacy

Creator Roles

Marsella, S.: Conceptualization, Funding acquisition, Resources, Supervision, Validation, Writing – review and editing

• Authors: Doroudi, R., Sequeira, P., Marsella, S., Ergun, O., Azghandi, R., Kaeli, D., Sun, Y., and Griffin, J.
• College/School: College of Medical Veterinary and Life Sciences > School of Psychology & Neuroscience
• Journal Name: PLoS ONE
• Publisher: Public Library of Science
• ISSN: 1932-6203
• ISSN (Online): 1932-6203
• Copyright Holders: Copyright © 2020 Doroudi et al.
• First Published: First published in PLoS ONE 15(2):e0224761
• Publisher Policy: Reproduced under a Creative Commons License