IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v157y2014icp261-272.html
   My bibliography  Save this article

Investing in disaster management capabilities versus pre-positioning inventory: A new approach to disaster preparedness

Author

Listed:
  • Kunz, Nathan
  • Reiner, Gerald
  • Gold, Stefan

Abstract

Disaster preparedness has been recognized as a central element in reducing the impact of disasters worldwide. The usual methods of preparedness, such as pre-positioning relief inventory in countries prone to disasters, are problematic because they require high investment in various locations, due to the uncertainty about the timing and location of the next disaster. Investing in disaster management capabilities, such as training staff, pre-negotiating customs agreements with countries prone to disasters, or harmonizing import procedures with local customs clearance procedures, has been recognized as a way to overcome this constraint. By means of system dynamics modeling, we model the delivery process of ready-to-use therapeutic food items during the immediate response phase of a disaster, and we analyze the performance of different preparedness scenarios. We find that pre-positioning inventory produces positive results for the beneficiaries, but at extremely high costs. Investing in disaster management capabilities is an interesting alternative, as it allows lead time reductions of up to 67% (18 days) compared to a scenario without preparedness, at significantly lower costs than pre-positioning inventory. We find that the best performance can be achieved when combining both preparedness strategies, allocating part of the available funding to disaster management capabilities and part to pre-positioning inventory. We analyze 2828 such combined scenarios to identify the best mix of preparedness strategies for different levels of available funding. On the basis of our findings, we provide recommendations for relief organizations on how to allocate their preparedness budget.

Suggested Citation

  • Kunz, Nathan & Reiner, Gerald & Gold, Stefan, 2014. "Investing in disaster management capabilities versus pre-positioning inventory: A new approach to disaster preparedness," International Journal of Production Economics, Elsevier, vol. 157(C), pages 261-272.
    • Handle: RePEc:eee:proeco:v:157:y:2014:i:c:p:261-272
    DOI: 10.1016/j.ijpe.2013.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527313004611
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2013.11.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mete, Huseyin Onur & Zabinsky, Zelda B., 2010. "Stochastic optimization of medical supply location and distribution in disaster management," International Journal of Production Economics, Elsevier, vol. 126(1), pages 76-84, July.
    2. Lin, Jun & Chai, Kah Hin & Wong, Yoke San & Brombacher, Aarnout C., 2008. "A dynamic model for managing overlapped iterative product development," European Journal of Operational Research, Elsevier, vol. 185(1), pages 378-392, February.
    3. Rawls, Carmen G. & Turnquist, Mark A., 2010. "Pre-positioning of emergency supplies for disaster response," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 521-534, May.
    4. Clay Whybark, D., 2007. "Issues in managing disaster relief inventories," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 228-235, July.
    5. Taskin, Selda & Lodree Jr., Emmett J., 2010. "Inventory decisions for emergency supplies based on hurricane count predictions," International Journal of Production Economics, Elsevier, vol. 126(1), pages 66-75, July.
    6. G Barbarosoǧlu & Y Arda, 2004. "A two-stage stochastic programming framework for transportation planning in disaster response," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(1), pages 43-53, January.
    7. Serhan Duran & Marco A. Gutierrez & Pinar Keskinocak, 2011. "Pre-Positioning of Emergency Items for CARE International," Interfaces, INFORMS, vol. 41(3), pages 223-237, June.
    8. L N Van Wassenhove, 2006. "Humanitarian aid logistics: supply chain management in high gear," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(5), pages 475-489, May.
    9. Altay, Nezih & Green III, Walter G., 2006. "OR/MS research in disaster operations management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 475-493, November.
    10. F. Maon & A. Lindgreen & J. Vanhamme, 2009. "Developing supply chains in disaster relief operations through cross-sector socially oriented collaborations : a theoretical model," Post-Print hal-00575871, HAL.
    11. Aurelie Charles & Matthieu Lauras, 2011. "An enterprise modelling approach for better optimisation modelling: application to the humanitarian relief chain coordination problem," Post-Print hal-01685415, HAL.
    12. Gatignon, Aline & Van Wassenhove, Luk N. & Charles, Aurélie, 2010. "The Yogyakarta earthquake: Humanitarian relief through IFRC's decentralized supply chain," International Journal of Production Economics, Elsevier, vol. 126(1), pages 102-110, July.
    13. S Taskin & E J Lodree,, 2011. "A Bayesian decision model with hurricane forecast updates for emergency supplies inventory management," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1098-1108, June.
    14. Rogelio Oliva & John D. Sterman, 2001. "Cutting Corners and Working Overtime: Quality Erosion in the Service Industry," Management Science, INFORMS, vol. 47(7), pages 894-914, July.
    15. Oloruntoba, Richard, 2010. "An analysis of the Cyclone Larry emergency relief chain: Some key success factors," International Journal of Production Economics, Elsevier, vol. 126(1), pages 85-101, July.
    16. Jahangirian, Mohsen & Eldabi, Tillal & Naseer, Aisha & Stergioulas, Lampros K. & Young, Terry, 2010. "Simulation in manufacturing and business: A review," European Journal of Operational Research, Elsevier, vol. 203(1), pages 1-13, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abhishek Behl & Pankaj Dutta, 2019. "Humanitarian supply chain management: a thematic literature review and future directions of research," Annals of Operations Research, Springer, vol. 283(1), pages 1001-1044, December.
    2. Sabbaghtorkan, Monir & Batta, Rajan & He, Qing, 2020. "Prepositioning of assets and supplies in disaster operations management: Review and research gap identification," European Journal of Operational Research, Elsevier, vol. 284(1), pages 1-19.
    3. Rodolfo Modrigais Strauss Nunes & Susana Carla Farias Pereira, 2022. "Intellectual structure and trends in the humanitarian operations field," Annals of Operations Research, Springer, vol. 319(1), pages 1099-1157, December.
    4. Aurelie Charles & Matthieu Lauras & Luk N. van Wassenhove & Lionel Dupont, 2016. "Designing an efficient humanitarian supply network," Post-Print hal-01532132, HAL.
    5. Prima Denny Sentia & Syaimak Abdul Shukor & Amelia Natasya Abdul Wahab & Muriati Mukhtar, 2023. "Logistic distribution in humanitarian supply chain management: a thematic literature review and future research," Annals of Operations Research, Springer, vol. 323(1), pages 175-201, April.
    6. Renata Turkeš & Daniel Palhazi Cuervo & Kenneth Sörensen, 2019. "Pre-positioning of emergency supplies: does putting a price on human life help to save lives?," Annals of Operations Research, Springer, vol. 283(1), pages 865-895, December.
    7. A. Anaya-Arenas & J. Renaud & A. Ruiz, 2014. "Relief distribution networks: a systematic review," Annals of Operations Research, Springer, vol. 223(1), pages 53-79, December.
    8. Alem, Douglas & Clark, Alistair & Moreno, Alfredo, 2016. "Stochastic network models for logistics planning in disaster relief," European Journal of Operational Research, Elsevier, vol. 255(1), pages 187-206.
    9. Davis, Lauren B. & Samanlioglu, Funda & Qu, Xiuli & Root, Sarah, 2013. "Inventory planning and coordination in disaster relief efforts," International Journal of Production Economics, Elsevier, vol. 141(2), pages 561-573.
    10. Li, Lingfeng & Jin, Mingzhou & Zhang, Li, 2011. "Sheltering network planning and management with a case in the Gulf Coast region," International Journal of Production Economics, Elsevier, vol. 131(2), pages 431-440, June.
    11. Battarra, Maria & Balcik, Burcu & Xu, Huifu, 2018. "Disaster preparedness using risk-assessment methods from earthquake engineering," European Journal of Operational Research, Elsevier, vol. 269(2), pages 423-435.
    12. Laura Laguna-Salvadó & Matthieu Lauras & Uche Okongwu & Tina Comes, 2019. "A multicriteria Master Planning DSS for a sustainable humanitarian supply chain," Annals of Operations Research, Springer, vol. 283(1), pages 1303-1343, December.
    13. Qi, Mingyao & Yang, Ying & Cheng, Chun, 2023. "Location and inventory pre-positioning problem under uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    14. Li, Xiaoping & Batta, Rajan & Kwon, Changhyun, 2017. "Effective and equitable supply of gasoline to impacted areas in the aftermath of a natural disaster," Socio-Economic Planning Sciences, Elsevier, vol. 57(C), pages 25-34.
    15. Kelle, Peter & Schneider, Helmut & Yi, Huizhi, 2014. "Decision alternatives between expected cost minimization and worst case scenario in emergency supply – Second revision," International Journal of Production Economics, Elsevier, vol. 157(C), pages 250-260.
    16. Caunhye, Aakil M. & Nie, Xiaofeng & Pokharel, Shaligram, 2012. "Optimization models in emergency logistics: A literature review," Socio-Economic Planning Sciences, Elsevier, vol. 46(1), pages 4-13.
    17. John B. Coles & Jing Zhang & Jun Zhuang, 2022. "Bridging the research-practice gap in disaster relief: using the IFRC Code of Conduct to develop an aid model," Annals of Operations Research, Springer, vol. 312(2), pages 1337-1357, May.
    18. Baskaya, Serhat & Ertem, Mustafa Alp & Duran, Serhan, 2017. "Pre-positioning of relief items in humanitarian logistics considering lateral transhipment opportunities," Socio-Economic Planning Sciences, Elsevier, vol. 57(C), pages 50-60.
    19. TURKEŠ, Renata & SÖRENSEN, Kenneth, 2018. "Case studies and random instances for the problem of pre-positioning emergency supplies," Working Papers 2018004, University of Antwerp, Faculty of Business and Economics.
    20. Yanbin Chang & Yongjia Song & Burak Eksioglu, 2022. "A stochastic look-ahead approach for hurricane relief logistics operations planning under uncertainty," Annals of Operations Research, Springer, vol. 319(1), pages 1231-1263, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:157:y:2014:i:c:p:261-272. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.