Supply Chain Network Security Investment Strategies Based on Nonlinear Budget Constraints: The Moderating Roles of Market Share and Attack Risk

Jiajie Cheng; Jiaxin Wang; Caijiao Li; Luxiang Zhang; Yusheng Fan; Yujie Bao; Wen Zhou

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arXiv · 2502.10448

Supply Chain Network Security Investment Strategies Based on Nonlinear Budget Constraints: The Moderating Roles of Market Share and Attack Risk

Jiajie Cheng·Jiaxin Wang·Caijiao Li·Luxiang Zhang·Yusheng Fan·Yujie Bao·Wen Zhou

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Abstract

In the context of the rapid development of digital supply chain networks, dealing with the increasing cybersecurity threats and formulating effective security investment strategies to defend against cyberattack risks are the core issues in supply chain management. Cybersecurity investment decision-making is a key strategic task in enterprise supply chain manage-ment. Traditional game theory models and linear programming methods make it challenging to deal with complex problems such as multi-party par-ticipation in the supply chain, resource constraints, and risk uncertainty, re-sulting in enterprises facing high risks and uncertainties in the field of cy-bersecurity. To effectively meet this challenge, this study proposes a nonlin-ear budget-constrained cybersecurity investment optimization model based on variational inequality and projection shrinkage algorithm. This method simulates the impact of market competition on security investment by intro-ducing market share variables, combining variational inequality and projec-tion shrinkage algorithm to solve the model, and analyzing the effect of dif-ferent variables such as budget constraints, cyberattack losses, and market share on supply chain network security. In numerical analysis, the model achieved high cybersecurity levels of 0.96 and 0.95 in the experimental sce-narios of two retailers and two demand markets, respectively, and the budget constraint analysis revealed the profound impact of budget constraints on cybersecurity investment. Through numerical experiments and comparative analysis, the effectiveness and operability of this method in improving sup-ply chain network security are verified.

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Jiajie Cheng, Jiaxin Wang, Caijiao Li, Luxiang Zhang, Yusheng Fan, Yujie Bao, Wen Zhou. 2025-02-11. Supply Chain Network Security Investment Strategies Based on Nonlinear Budget Constraints: The Moderating Roles of Market Share and Attack Risk. https://arxiv.org/abs/2502.10448

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