Supply chain risk management for critical commodities: A system dynamics model for the case of the rare earth elements

摘要

We investigate mitigation strategies that potentially reduce the supply chain risk caused by exogenous interventions for critical commodities. We apply a system dynamics approach to examine the individual company's reaction in the rare earth elements (REEs) supply chain to China's introduction of export restrictions over a three-stage supply chain for 11 REEs, 10 semi-finished goods (SFG), and 21 finished goods (FG) between 2004 and 2015. We analyze how FG and SFG substitution, secondary recycling, supply extension and research and development (R & D) affect dynamic variables such as the price level, supply and demand on each stage to determine the effectiveness of each strategy for mining companies, SFG and FG producers.