This study examines how market structure moderates supply chain resilience to tariff volatility through a Monte Carlo simulation of monopoly, oligopoly, and perfect competition. Drawing on profit maximization theory, supply chain resilience theory, and survivability theory, we model the performance of firms across 81 experimental scenarios, varying tariff rates, pass-through rates, and desired profit margins. The findings reveal a clear hierarchy of resilience: oligopolies emerge as the most resilient, maintaining positive margins even under high tariffs through strategic coordination; monopolies achieve the highest margins but exhibit the most volatility, with profitability collapsing as tariffs rise; and perfectly competitive firms are the most vulnerable, unable to survive tariffs beyond moderate levels due to their lack of pricing power. Pass-through capability, a key resilience mechanism, is most effective in monopoly settings where it protects profit margins, while desired profit margins show no significant impact on performance outcomes, suggesting that strategic intent alone is insufficient without the market power to execute pricing strategies. The results demonstrate that market structure fundamentally determines supply chain resilience to trade policy uncertainty. For practice, the findings highlight the need for market-structure-aware resilience strategies: monopolies should dynamically adjust pass-through based on tariff levels, oligopolies should maintain consistent pass-through to coordinate with competitors, and competitive firms should prioritize cost reduction, diversification, and consolidation to survive tariff shocks. For policymakers, the results underscore the extreme vulnerability of competitive industries to tariff volatility, the need to monitor oligopolistic coordination that may harm consumers, and the importance of considering market concentration when designing trade policy. This research extends profit maximization and survival-based theories by demonstrating that resilience mechanisms are contingent on competitive position, and it provides a framework for understanding the differential impacts of tariffs across industries. The hierarchy of resilience revealed by this analysis—oligopolies most resilient, monopolies most volatile, and competitive firms most vulnerable—offers a foundation for firms navigating volatile trade environments and for policymakers designing effective trade policies.

Keywords:

Supply chain resilience, Market structure, Trade policy uncertainty, Tariff volatility, Demand elasticity

@article{oscm-2026-962,
  title={Market Structure as a Moderator of Supply Chain Resilience: A Monte Carlo Simulation of Tariff Volatility},
  year={2026},
  author={Douglas L. McWilliams and Nero Edevbie},
  journal={Operations and Supply Chain Management: An International Journal},
  volume={19},
  number={4},
  pages={671--686},
  doi={10.31387/oscm0670545}
}

Douglas L. McWilliams, Nero Edevbie (2026). Market Structure as a Moderator of Supply Chain Resilience: A Monte Carlo Simulation of Tariff Volatility. Operations and Supply Chain Management: An International Journal, 19(4), 671-686. https://doi.org/10.31387/oscm0670545