IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v167y2022ics1366554522002939.html
   My bibliography  Save this article

A hybrid relief procurement contract for humanitarian logistics

Author

Listed:
  • Ghavamifar, Ali
  • Torabi, S. Ali
  • Moshtari, Mohammad

Abstract

This paper proposes a novel hybrid relief procurement contract in which the specific features of option contract and quantity flexible contract are used to coordinate the supply of a relief item between a supplier and a humanitarian organization. First, a mathematical statistics approach is used to categorize different provinces according to a multi-hazard risk approach. Then, the proposed contract is elaborated. Different managerial insights are derived from conducting several sensitivity analyses in our case study. The results reveal that using the proposed contract can significantly improve the procurement process by reducing the shortage and overstocking risks in humanitarian organizations.

Suggested Citation

  • Ghavamifar, Ali & Torabi, S. Ali & Moshtari, Mohammad, 2022. "A hybrid relief procurement contract for humanitarian logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
  • Handle: RePEc:eee:transe:v:167:y:2022:i:c:s1366554522002939
    DOI: 10.1016/j.tre.2022.102916
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554522002939
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.tre.2022.102916?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. Sun, Huali & Li, Jiamei & Wang, Tingsong & Xue, Yaofeng, 2022. "A novel scenario-based robust bi-objective optimization model for humanitarian logistics network under risk of disruptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    2. Dufour, Émilie & Laporte, Gilbert & Paquette, Julie & Rancourt, Marie–Ève, 2018. "Logistics service network design for humanitarian response in East Africa," Omega, Elsevier, vol. 74(C), pages 1-14.
    3. Shamsi G., N. & Ali Torabi, S. & Shakouri G., H., 2018. "An option contract for vaccine procurement using the SIR epidemic model," European Journal of Operational Research, Elsevier, vol. 267(3), pages 1122-1140.
    4. Xin Yao & Ruting Huang & Malin Song & Nishikant Mishra, 2018. "Pre-positioning inventory and service outsourcing of relief material supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 56(21), pages 6859-6871, November.
    5. Akbarpour, Mina & Ali Torabi, S. & Ghavamifar, Ali, 2020. "Designing an integrated pharmaceutical relief chain network under demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    6. Serhan Duran & Özlem Ergun & Pınar Keskinocak & Julie L. Swann, 2013. "Humanitarian Logistics: Advanced Purchasing and Pre-Positioning of Relief Items," International Series in Operations Research & Management Science, in: James H. Bookbinder (ed.), Handbook of Global Logistics, edition 127, chapter 0, pages 447-462, Springer.
    7. Wu, Jiang & Zou, Liuxin & Gong, Yeming & Chen, Mingyang, 2021. "The anti-collusion dilemma: Information sharing of the supply chain under buyback contracts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    8. Christian Wankmüller & Gerald Reiner, 2021. "Identifying Challenges and Improvement Approaches for More Efficient Procurement Coordination in Relief Supply Chains," Sustainability, MDPI, vol. 13(4), pages 1-23, February.
    9. Jochen Schmidt & Iain Matcham & Stefan Reese & Andrew King & Rob Bell & Roddy Henderson & Graeme Smart & Jim Cousins & Warwick Smith & Dave Heron, 2011. "Quantitative multi-risk analysis for natural hazards: a framework for multi-risk modelling," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 58(3), pages 1169-1192, September.
    10. Chu, Xiang & Liu, Jun & Ren, Long & Gong, Daqing, 2020. "Optimal contract design with a common agency in last-mile logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 139(C).
    11. 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.
    12. Ertem, Mustafa A. & Buyurgan, Nebil & Pohl, Edward A., 2012. "Using announcement options in the bid construction phase for disaster relief procurement," Socio-Economic Planning Sciences, Elsevier, vol. 46(4), pages 306-314.
    13. Aghajani, Mojtaba & Torabi, S. Ali & Heydari, Jafar, 2020. "A novel option contract integrated with supplier selection and inventory prepositioning for humanitarian relief supply chains," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    14. Liu, Shuai & Hua, Guowei & Cheng, T.C.E. & Dong, Jingxin, 2021. "Unmanned vehicle distribution capacity sharing with demand surge under option contracts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    15. Xihui Wang & Yunfei Wu & Liang Liang & Zhimin Huang, 2016. "Service outsourcing and disaster response methods in a relief supply chain," Annals of Operations Research, Springer, vol. 240(2), pages 471-487, May.
    16. Sabine Böckem & Ulf Schiller, 2008. "Option Contracts in Supply Chains," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 219-245, March.
    17. Masoud Rabbani & Hamed Vafa Arani & Hamed Rafiei, 2015. "Option contract application in emergency supply chains," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 20(4), pages 385-397.
    18. Liu, Yang & Cui, Na & Zhang, Jianghua, 2019. "Integrated temporary facility location and casualty allocation planning for post-disaster humanitarian medical service," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 1-16.
    19. Loree, Nick & Aros-Vera, Felipe, 2018. "Points of distribution location and inventory management model for Post-Disaster Humanitarian Logistics," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 116(C), pages 1-24.
    20. Liu, Kanglin & Zhang, Hengliang & Zhang, Zhi-Hai, 2021. "The efficiency, equity and effectiveness of location strategies in humanitarian logistics: A robust chance-constrained approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    21. Xihui Wang & Yu Fan & Liang Liang & Harwin De Vries & Luk N. Van Wassenhove, 2019. "Augmenting Fixed Framework Agreements in Humanitarian Logistics with a Bonus Contract," Production and Operations Management, Production and Operations Management Society, vol. 28(8), pages 1921-1938, August.
    22. Anna Nagurney & Min Yu & Qiang Qiang, 2011. "Supply chain network design for critical needs with outsourcing," Papers in Regional Science, Wiley Blackwell, vol. 90(1), pages 123-142, March.
    23. 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.
    24. Balcik, Burcu & Beamon, Benita M. & Krejci, Caroline C. & Muramatsu, Kyle M. & Ramirez, Magaly, 2010. "Coordination in humanitarian relief chains: Practices, challenges and opportunities," International Journal of Production Economics, Elsevier, vol. 126(1), pages 22-34, July.
    25. Caunhye, Aakil M. & Zhang, Yidong & Li, Mingzhe & Nie, Xiaofeng, 2016. "A location-routing model for prepositioning and distributing emergency supplies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 161-176.
    26. Kovacs, Gyöngyi & Moshtari, Mohammad, 2019. "A roadmap for higher research quality in humanitarian operations: A methodological perspective," European Journal of Operational Research, Elsevier, vol. 276(2), pages 395-408.
    27. Liang, Liang & Wang, Xihui & Gao, Jianguo, 2012. "An option contract pricing model of relief material supply chain," Omega, Elsevier, vol. 40(5), pages 594-600.
    28. Shu, Jia & Lv, Wenya & Na, Qing, 2021. "Humanitarian relief supply network design: Expander graph based approach and a case study of 2013 Flood in Northeast China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    29. Ahmadi, Morteza & Seifi, Abbas & Tootooni, Behnam, 2015. "A humanitarian logistics model for disaster relief operation considering network failure and standard relief time: A case study on San Francisco district," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 75(C), pages 145-163.
    30. Burcu Balcik & Deniz Ak, 2014. "Supplier Selection for Framework Agreements in Humanitarian Relief," Production and Operations Management, Production and Operations Management Society, vol. 23(6), pages 1028-1041, June.
    31. Nelly Bart & Tatyana Chernonog & Tal Avinadav, 2021. "Revenue-sharing contracts in supply chains: a comprehensive literature review," International Journal of Production Research, Taylor & Francis Journals, vol. 59(21), pages 6633-6658, November.
    32. Rennemo, Sigrid Johansen & Rø, Kristina Fougner & Hvattum, Lars Magnus & Tirado, Gregorio, 2014. "A three-stage stochastic facility routing model for disaster response planning," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 116-135.
    33. Rezaei-Malek, Mohammad & Torabi, S. Ali & Tavakkoli-Moghaddam, Reza, 2019. "Prioritizing disaster-prone areas for large-scale earthquakes' preparedness: Methodology and application," Socio-Economic Planning Sciences, Elsevier, vol. 67(C), pages 9-25.
    34. Jingxian Chen & Liang Liang & Dong-Qing Yao, 2017. "Pre-positioning of relief inventories for non-profit organizations: a newsvendor approach," Annals of Operations Research, Springer, vol. 259(1), pages 35-63, December.
    35. Nie, Tengfei & Du, Shaofu, 2017. "Dual-fairness supply chain with quantity discount contracts," European Journal of Operational Research, Elsevier, vol. 258(2), pages 491-500.
    36. Ece Aslan & Melih Çelik, 2019. "Pre-positioning of relief items under road/facility vulnerability with concurrent restoration and relief transportation," IISE Transactions, Taylor & Francis Journals, vol. 51(8), pages 847-868, August.
    37. Moshtari, Mohammad & Altay, Nezih & Heikkilä, Jussi & Gonçalves, Paulo, 2021. "Procurement in humanitarian organizations: Body of knowledge and practitioner's challenges," International Journal of Production Economics, Elsevier, vol. 233(C).
    38. Wang, Weiqiao & Yang, Kai & Yang, Lixing & Gao, Ziyou, 2021. "Two-stage distributionally robust programming based on worst-case mean-CVaR criterion and application to disaster relief management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    39. Zheng, Qi & Zhou, Li & Fan, Tijun & Ieromonachou, Petros, 2019. "Joint procurement and pricing of fresh produce for multiple retailers with a quantity discount contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 130(C), pages 16-36.
    40. Neeta Baporikar & Liina Bibi Shangheta, 2018. "Challenges Facing Humanitarian Logistics in a Nonprofit Organization," International Journal of Applied Logistics (IJAL), IGI Global, vol. 8(1), pages 35-56, January.
    41. Andy A. Tsay, 1999. "The Quantity Flexibility Contract and Supplier-Customer Incentives," Management Science, INFORMS, vol. 45(10), pages 1339-1358, October.
    42. Baoyin Liu & Yim Ling Siu & Gordon Mitchell & Wei Xu, 2016. "The danger of mapping risk from multiple natural hazards," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 82(1), pages 139-153, May.
    43. Wang, Xihui & Li, Feng & Liang, Liang & Huang, Zhimin & Ashley, Allan, 2015. "Pre-purchasing with option contract and coordination in a relief supply chain," International Journal of Production Economics, Elsevier, vol. 167(C), pages 170-176.
    44. Ali Torabi, S. & Shokr, Iman & Tofighi, Saeideh & Heydari, Jafar, 2018. "Integrated relief pre-positioning and procurement planning in humanitarian supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 123-146.
    45. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    46. Abazari, Seyed Reza & Aghsami, Amir & Rabbani, Masoud, 2021. "Prepositioning and distributing relief items in humanitarian logistics with uncertain parameters," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yao, Chen & Fan, Bo & Zhao, Yupan & Cheng, Xinyue, 2023. "Evolutionary dynamics of supervision-compliance game on optimal pre-positioning strategies in relief supply chain management," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    2. Guo, Penghui & Zhu, Jianjun, 2023. "Capacity reservation for humanitarian relief: A logic-based Benders decomposition method with subgradient cut," European Journal of Operational Research, Elsevier, vol. 311(3), pages 942-970.

    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. Lijo John & Anand Gurumurthy & Arqum Mateen & Gopalakrishnan Narayanamurthy, 2022. "Improving the coordination in the humanitarian supply chain: exploring the role of options contract," Annals of Operations Research, Springer, vol. 319(1), pages 15-40, December.
    2. Aghajani, Mojtaba & Ali Torabi, S. & Altay, Nezih, 2023. "Resilient relief supply planning using an integrated procurement-warehousing model under supply disruption," Omega, Elsevier, vol. 118(C).
    3. Guo, Penghui & Zhu, Jianjun, 2023. "Capacity reservation for humanitarian relief: A logic-based Benders decomposition method with subgradient cut," European Journal of Operational Research, Elsevier, vol. 311(3), pages 942-970.
    4. Dönmez, Zehranaz & Kara, Bahar Y. & Karsu, Özlem & Saldanha-da-Gama, Francisco, 2021. "Humanitarian facility location under uncertainty: Critical review and future prospects," Omega, Elsevier, vol. 102(C).
    5. Kundu, Tanmoy & Sheu, Jiuh-Biing & Kuo, Hsin-Tsz, 2022. "Emergency logistics management—Review and propositions for future research," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    6. Moshtari, Mohammad & Altay, Nezih & Heikkilä, Jussi & Gonçalves, Paulo, 2021. "Procurement in humanitarian organizations: Body of knowledge and practitioner's challenges," International Journal of Production Economics, Elsevier, vol. 233(C).
    7. Shao, Jianfang & Fan, Yu & Wang, Xihui & Liang, Changyong & Liang, Liang, 2023. "Designing a new framework agreement in humanitarian logistics based on deprivation cost functions," International Journal of Production Economics, Elsevier, vol. 256(C).
    8. Fan, Yu & Shao, Jianfang & Wang, Xihui, 2023. "Relief items procurement and delivery through cooperation with suppliers and logistics companies considering budget constraints," International Journal of Production Economics, Elsevier, vol. 264(C).
    9. Liu, Kanglin & Zhang, Hengliang & Zhang, Zhi-Hai, 2021. "The efficiency, equity and effectiveness of location strategies in humanitarian logistics: A robust chance-constrained approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    10. Chen, Yingzhen & Zhao, Qiuhong & Huang, Kai & Xi, Xunzhuo, 2022. "A Bi-objective optimization model for contract design of humanitarian relief goods procurement considering extreme disasters," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    11. 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.
    12. Ali Torabi, S. & Shokr, Iman & Tofighi, Saeideh & Heydari, Jafar, 2018. "Integrated relief pre-positioning and procurement planning in humanitarian supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 123-146.
    13. Lijo John & Anand Gurumurthy, 2022. "Are quantity flexibility contracts with discounts in the presence of spot market procurement relevant for the humanitarian supply chain? An exploration," Annals of Operations Research, Springer, vol. 315(2), pages 1775-1802, August.
    14. Zhang, Meng & Kong, Zhaojun, 2023. "A two-phase combinatorial double auction and negotiation mechanism for socialized joint reserve mode in emergency preparedness," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    15. Timperio, Giuseppe & Kundu, Tanmoy & Klumpp, Matthias & de Souza, Robert & Loh, Xiu Hui & Goh, Kelvin, 2022. "Beneficiary-centric decision support framework for enhanced resource coordination in humanitarian logistics: A case study from ASEAN," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    16. Rodríguez-Espíndola, Oscar & Ahmadi, Hossein & Gastélum-Chavira, Diego & Ahumada-Valenzuela, Omar & Chowdhury, Soumyadeb & Dey, Prasanta Kumar & Albores, Pavel, 2023. "Humanitarian logistics optimization models: An investigation of decision-maker involvement and directions to promote implementation," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    17. Meng, Qingchun & Kao, Zhiping & Guo, Ying & Bao, Chunbing, 2023. "An emergency supplies procurement strategy based on a bidirectional option contract," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    18. Aghajani, Mojtaba & Torabi, S. Ali & Heydari, Jafar, 2020. "A novel option contract integrated with supplier selection and inventory prepositioning for humanitarian relief supply chains," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    19. Akbarpour, Mina & Ali Torabi, S. & Ghavamifar, Ali, 2020. "Designing an integrated pharmaceutical relief chain network under demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    20. Wang, Duo & Yang, Kai & Yang, Lixing & Dong, Jianjun, 2023. "Two-stage distributionally robust optimization for disaster relief logistics under option contract and demand ambiguity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).

    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:transe:v:167:y:2022:i:c:s1366554522002939. 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/wps/find/journaldescription.cws_home/600244/description#description .

    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.