A Simulation-Based Approach to Trade-off Analysis of Port Security

Motivated by the September 11 attacks, we are addressing the problem of policy analysis of supply-chain security. Considering the potential economic and operational impacts of inspection together with the inherent difficulty of assigning a reasonable cost to an inspection failure call for a policy analysis methodology in which stakeholders can understand the trade-offs between the diverse and potentially conflicting objectives. To obtain this information, we used a simulation-based methodology to characterize the set of Pareto optimal solutions with respect to the multiple objectives represented in the decision problem. Our methodology relies on simulation and the response surface method (RSM) to model the relationships between inspection policies and relevant stakeholder objectives in order to construct a set of Pareto optimal solutions. The approach is illustrated with an application to a real-world supply chain.