The Problem of Managing a Strategic Reserve

The Problem of Managing a Strategic Reserve

Author(s): David Cole and Loren Haarsma and Jack Snoeyink

The College Mathematics Journal, Vol. 17, No. 1 (Jan., 1986), pp. 48-60.

Published by: Mathematical Association of America

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Tags: First order equations

Abstract: The article covers the complexities of effectively predicting stockpile sizes and stockpiling methodologies for effectively preparing for long term emergency scenarios where certain resources (cobalt, oil, etc.) become suddenly scare are far more expensive due to unfavorable economic forces. In the course of the article, the authors develops a model based on overall resource utilization for a war time scenario based on the parameters set out by FEMA, and considers the time it takes to build a stockpile to achieve those parameters. Additionally, as a result of the large volume purchases made by nation sized consumers, the model includes a portion considering optimization of purchasing rate so as not to increase resource demand beyond global supply, and thereby avoids potential price hikes due to over consumption while building the target stockpile. Furthermore, the authors consider the cost benefit comparison of purchasing more of the stockpiled resources faster versus slowly accumulating them and risking having insufficient supply in some future emergency scenario. As part of the considerations of more stockpiling in general, the authors explore the costs associated with the storage, logistic management and general maintenance costs of building and sustaining a stockpile at varying rates of accumulation, and at various prices for resource of interest at times in the past in order to potentially predict future costs of maintaining such stockpiles. Perhaps most importantly, the authors recognize the unsustainability of a national stockpile and the neccessity of generating long term solutions to the resource scarcity the stockpiles are meant to temporarily alleviate. The model the authors discuss models reality closely and works within reasonable margins of error for its ordained purpose(s). It should be noted however, that the authors do not directly suggest any long term solutions specifically, they merely note the need to generate such solutions to combat the limitations of a stockpiling strategy in the event of emergency. Thus the models discussed contain little to no suggestions or predictions for the effects of long term solutions to resource scarcity. Michael Thomas Lynn, Stephen F. Austin State University, May 2, 2017.

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