Optimal Resource Allocation for Recovery of Interdependent Systems: Case Study of the Deepwater Horizon Oil Spill

Investing in infrastructure and industry sectors can lessen the direct impacts of disruptive events, and a risk-based input-output model can demonstrate how those direct impacts propagate to other economic sectors. We develop and compare two different decision models to determine the optimal resource allocation to assist impacted sectors to recover. The first decision model minimizes direct impacts from a disruption, and the second model minimizes direct and indirect impacts, or total production losses. We solve for the optimal allocation in each model as a function of model parameters, and we compare the two models’ solutions. We deploy these models to a data-driven case study analyzing the economic impacts of the Deepwater Horizon oil spill, which adversely impacted several industries in the region such as tourism, fishing, and real estate. These models can be applied to different homeland security situations to help governments and organizations determine proper resource allocation during and after a disruption.