Pre-positioning hurricane supplies in a commercial supply chain
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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