How to increase the impact of disaster relief: a study of transportation rates, framework agreements and product distribution

Timo Goßler, Tina Wakolbinger, Anna Nagurney, Patrizia Daniele

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung

Abstract

Due to restricted budgets of relief organizations, costs of hiring transportation service providers steer
distribution decisions and limit the impact of disaster relief. To improve the success of future humanitarian
operations, it is of paramount importance to understand this relationship in detail and to identify
mitigation actions, always considering the interdependencies between multiple independent actors in humanitarian
logistics. In this paper, we develop a game-theoretic model in order to investigate the influence
of transportation costs on distribution decisions in long-term relief operations and to evaluate measures
for improving the fulfillment of beneficiary needs. The equilibrium of the model is a Generalized Nash
Equilibrium, which has had few applications in the supply chain context to date. We formulate it, utilizing
the construct of a Variational Equilibrium, as a Variational Inequality and perform numerical simulations
in order to study the effects of three interventions: an increase in carrier competition, a reduction of
transportation costs and an extension of framework agreements. The results yield important implications
for policy makers and humanitarian organizations (HOs). Increasing the number of preselected carriers
strengthens the bargaining power of HOs and improves impact up to a certain limit. The limit is reached
when carriers set framework rates equal to transportation unit costs. Reductions of transportation costs
have a consistently positive, but decreasing marginal benefit without any upper bound. They provide
the highest benefit when the bargaining power of HOs is weak. On the contrary, extending framework
agreements enables most improvements when the bargaining power of HOs is strong.
OriginalspracheEnglisch
Seiten (von - bis)126 - 141
FachzeitschriftEuropean Journal of Operational Research (EJOR)
Jahrgang274
Ausgabenummer1
DOIs
PublikationsstatusVeröffentlicht - 2019

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