Supplier selection and pre-positioning strategy in humanitarian relief

• Published in: Omega (Oxford) 2019-03, Vol.83, p.287-298
• Main Authors: Hu, Shaolong, Dong, Zhijie Sasha
• Format: Article
• Language: English
• Subjects: Emergency logistics; Facility location; Failure risk; Stochastic programming; Supplier selection
• ISSN: 0305-0483; 1873-5274
• DOI: 10.1016/j.omega.2018.10.011

•Integrated supplier selection into the decision making of pre-positioning relief supplies.•Considered the use of supplier-owned inventory for disaster response with complementation.•Formulated this problem as a two-stage stochastic programming model with a consideration of failure risks under disasters.•Presented a case study of hurricane threats in the Gulf Coast area of the US.•Provided managerial insights about establishing close relationships with commercial suppliers from sensitivity analysis. Pre-positioning of relief supplies is one important preparedness action for natural disasters. This paper proposes the importance of supplier selection in humanitarian relief, and integrates it into the pre-positioning strategy. These suppliers have own physical inventories for regular business, and relief agencies are assumed to be able to use such inventories for disaster response by providing compensation. The supplier selection criteria include price discounts offered by suppliers based on order quantity and required lead time as well as physical inventory. By considering disruption risks, this paper presents a two-stage stochastic programming model to produce plans including facility location and inventory, supplier selection, and distribution of relief supplies. A case study focused on hurricane threats in the Gulf Coast area of the US illustrates the application of the proposed model. Sensitivity analysis of comparison experiments offers managerial insights for relief agencies.