Aid Allocation for Camp‐Based and Urban Refugees with Uncertain Demand and Replenishments

There are 26 million refugees worldwide seeking safety from persecution, violence, conflict, and human rights violations. Camp‐based refugees are those that seek shelter in refugee camps, whereas urban refugees inhabit nearby, surrounding populations. The systems that supply aid to refugee camps may suffer from ineffective distribution due to challenges in administration, demand uncertainty and volatility in funding. Aid allocation should be carried out in a manner that properly balances the need of ensuring sufficient aid for camp‐based refugees, with the ability to share excess inventory, when available, with urban refugees that at times seek nearby camp‐based aid. We develop an inventory management policy to govern a camp's sharing of aid with urban refugee populations in the midst of uncertainties related to camp‐based and urban demands, and replenishment cycles due to funding issues. We use the policy to construct costs associated with: (i) referring urban populations elsewhere, (ii) depriving camp‐based refugee populations, and (iii) holding excess inventory in the refugee camp system. We then seek to allocate aid in a manner that minimizes the expected overall cost to the system. We propose two approaches to solve the resulting optimization problem, and conduct computational experiments on a real‐world case study as well as on synthetic data. Our results are complemented by an extensive simulation study that reveals broad support for our optimal thresholds and allocations to generalize across varied key parameters and distributions. We conclude by presenting related discussions that reveal key managerial insights into humanitarian aid allocation under uncertainty.