Title: A conditional value-at-risk approach to studying the sustainable crude oil supply chains evolved due to change in government policies

Authors: Davoud Ghahremanlou; Wieslaw Kubiak

Addresses: Faculty of Business Administration, Memorial University of Newfoundland, St. John's, NL, Canada ' Faculty of Business Administration, Memorial University of Newfoundland, St. John's, NL, Canada

Abstract: Recently US oil and bioethanol industries have faced drastic economic damage due to the 2020 Saudi Arabia-Russia oil price war and coronavirus disease (COVID-19), resulting in many bankruptcies. Government policies have brought these two main industries together to ensure sustainable crude oil supply chains, to combat global warming and energy insecurity. This motivated us to extend the study of Ghahremanlou and Kubiak (2021a) to protect the current and new SCOSCs against financial risks during economic crises by providing insights for the government and the investors, working to rescue the industries. We employ conditional value-at-risk, and develop a two-stage stochastic programming model. We perform a case study of the State of Nebraska by carrying out a computational experiment with 10,710 different policy scenarios. We recommend robust strategic investment decisions to businesses during policy changes within economic crises. We also identify resilient strategic investment decisions.

Keywords: COVID-19; conditional value-at-risk; CVaR; government policies; economic crises; sustainable crude oil supply chain; two-stage stochastic programming.

DOI: 10.1504/IJOR.2024.143339

International Journal of Operational Research, 2024 Vol.51 No.4, pp.537 - 561

Received: 13 Feb 2022
Accepted: 05 Mar 2022
Published online: 16 Dec 2024 *

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