Value-based disposal mechanism for relief supply returns in post-disaster humanitarian logistics

Relief supplies are crucial in responding to a disaster. However, current studies focus on the location, delivery and allocation of relief supplies, and how to deal with the reusable relief supplies that are returned after a disaster response has not been addressed. From field investigations and interviews, in practice all the returned reusable relief supplies are piled up in warehouses until they expire, which leads to huge inventory costs. To solve this problem, a disposal mechanism (i.e., a value-based disposal standard and the use of auction as a new disposal approach) is designed and a Newsvendor model is constructed to help local authorities determine whether the relief supply returns should be stored for future use or disposed of by auction. This paper further considers whether local authorities can benefit more from pre-processing (e.g., classification and cleaning) the relief items for auction. A case study based on the practical background in China has been conducted to prove the feasibility of the mechanism. The result shows that through the disposal mechanism, local authorities can achieve a balance between reducing high inventory costs and avoiding the potential waste of useful relief items.