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Pre-positioning hurricane supplies in a commercial supply chain

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  • Lodree, Emmett J.
  • Ballard, Kandace N.
  • Song, Chang H.
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    Abstract

    Inventory control for retailers situated in the projected path of an observed hurricane or tropical storm can be challenging due to the inherent uncertainties associated with storm forecasts and demand requirements. In many cases, retailers react to pre- and post-storm demand surge by ordering emergency supplies from manufacturers posthumously. This wait-and-see approach often leads to stockout of the critical supplies and equipment used to support post-storm disaster relief operations, which compromises the performance of emergency response efforts and proliferates lost sales in the commercial supply chain. This paper proposes a proactive approach to managing disaster relief inventories from the perspective of a single manufacturing facility, where emergency supplies are pre-positioned throughout a network of geographically dispersed retailers in anticipation of an observed storm's landfall. Once the requirements of a specific disaster scenario are observed, supplies are then transshipped among retailers, with possible direct shipments from the manufacturer, to satisfy any unfulfilled demands. The manufacturer's pre-positioning problem is formulated as a two-stage stochastic programming model which is illustrated via a case study comprised of real-world hurricane scenarios. Our findings indicate that the expected performance of the proposed pre-positioning strategy over a variety of hurricane scenarios is more effective than the wait-and-see approach; currently used in practice.

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    Bibliographic Info

    Article provided by Elsevier in its journal Socio-Economic Planning Sciences.

    Volume (Year): 46 (2012)
    Issue (Month): 4 ()
    Pages: 291-305

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    Handle: RePEc:eee:soceps:v:46:y:2012:i:4:p:291-305

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    Web page: http://www.elsevier.com/locate/seps

    Related research

    Keywords: Inventory management; Humanitarian logistics; Stochastic programming;

    References

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    1. Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
    2. 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.
    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. Chang, Mei-Shiang & Tseng, Ya-Ling & Chen, Jing-Wen, 2007. "A scenario planning approach for the flood emergency logistics preparation problem under uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(6), pages 737-754, November.
    5. Campbell, Ann Melissa & Jones, Philip C., 2011. "Prepositioning supplies in preparation for disasters," European Journal of Operational Research, Elsevier, vol. 209(2), pages 156-165, March.
    6. Michael J. Fry & Roman Kapuscinski & Tava Lennon Olsen, 2001. "Coordinating Production and Delivery Under a (z, Z)-Type Vendor-Managed Inventory Contract," Manufacturing & Service Operations Management, INFORMS, vol. 3(2), pages 151-173, August.
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