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Vol. 25, No. 5, May 2016, pp. 791811 DOI 10.1111/poms.

12533
ISSN 1059-1478|EISSN 1937-5956|16|2505|0791 2015 Production and Operations Management Society

An Integrated Logistic Model for Predictable Disasters


Manoj Vanajakumari
College of Engineering, Texas A&M University, 3367 TAMU, College Station, Texas 77843, USA, manojuv@tamu.edu

Subodha Kumar
Mays Business School, Texas A&M University, Wehner 301F - 4217 TAMU, College Station, Texas 77843, USA, skumar@mays.tamu.edu

Sushil Gupta
College of Business Administration, Florida International University, RB 250, 11200 S.W. 8th St, Miami, Florida 33199, USA,
guptask@fiu.edu

n the aftermath of a disaster, the relief items are transported from temporary warehouses (Staging Areas, SAs) to the
I Points of Distribution (PODs). Reducing the response time to provide relief items to disaster victims and cost mini-
mization are two important objectives of this study. We propose an integrated optimization model for simultaneously
determining (1) locations of staging areas, (2) inventory assignments to these SAs, (3) selecting sizes and numbers of
trucks, and (4) routing of trucks from SAs to PODs. We also introduce another variable, a value function, which forces
the model to reduce the logistics response time. We study the interactions among these variables through extensive sen-
sitivity analysis. The time horizon for supply of relief items to disaster areas is usually limited to six days after the dis-
aster occurs. Therefore, we use the proposed optimization model in a rolling-horizon manner, one day at a time. This
reduces daily demand uncertainty. We analyze three disaster scenarios: (1) a low impact disaster, (2) a medium impact
disaster, and (3) a high impact disaster. We conduct 720 experiments with different parameter values, and provide
answers to the following questions that are useful for the logistic managers: (i) What are the right sizes (in terms of
storage capacities) of SAs closer to the PODs? (ii) How should the budget be allocated in a disaster scenario? (iii) What
mix of different types (in terms of sizes) of trucks should be selected in a given scenario? The most important manage-
rial insights include: (i) operational budget beyond a limit does not improve the operational efficiency, (ii) when the
budget is very low, it is essential to select smaller SAs close to the PODs in order to carry out operations in a feasible
manner, (iii) when the impact of disaster is high, it is always beneficial to select larger SAs close to the PODs (as long
as the budget is not very low), (iv) when the budget is high and the impact of disaster is not very high, the emergency
management administrators need to select SAs prudently based on the tradeoff between the operational cost and the
humanitarian value, and (v) the cost of operations is higher when all the trucks are of the same type compared to the
case when there is a mix of different types of trucks. Also, we find that the optimal selection of SAs is not impacted
by different combinations of the types of trucks. The focus of this study is on disasters that can be forecasted in
advance and provide some lead time for preparations, for example, hurricanes. In order to understand the disaster
management process of such disasters and develop our model, we (i) interviewed several emergency management
administrators, and (ii) studied the disaster management processes available in documents released by various govern-
ment agencies.

Key words: disaster; logistic operations; integer programming; last mile distribution; value function
History: Received: November 2014; Accepted: October 2015 by Martin Starr, after 3 revisions.

rapidly (Ukkusuri and Yushimito 2008). For exam-


1. Introduction ple, the total Hydrometeorological, Geological, and
An efficient response to a disaster involves getting Biological disasters have increased by 43% in the
the right relief supplies at the right time and loca- last two decades (Coppola 2006). Further, the
tion. The logistics play an important role in meet- annual spending worldwide on logistic operations
ing this objective. Hence, improving the efficiency for disasters has reached $15 billion (Christopher
of logistic operations in disaster management has and Tatham 2011). Also, the logistics account for
been the focus of several studies in the last few 6080% of the total costs involved in disaster
years (Kov acs and Spens 2009). The interest in this management (Perry 2005, Van Wassenhove 2006).
area is further stimulated by the fact that both the The focus of this study is to present an integra-
number of disasters and the costs of logistic opera- ted model for logistic operations in disaster man-
tions incurred to manage disasters are increasing agement that would help logisticians in not only
791
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
792 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

meeting the disaster management objectives, but next subsection, we begin with the description of dis-
also reducing the cost. tribution facilities.

1.1. Classification of Disasters 1.2.1. Distribution Facilities. Federal Emergency


Apte (2009) identifies three distinct phases to disaster Management Agency has a hierarchical structure of
management operations: (i) Preparednessopera- distribution facilities. On the top of the structure is (a)
tions before a disaster strikes, (ii) Responseinstantly Major Distribution Centers (MDC), followed by (b) Pre-
after a disaster, and (iii) Reconstructionaftermath of Staging Areas (also referred to as Logistical Staging
a disaster. The pre-positioned inventory from the first Areas), (c) County Staging Areas (also referred to as
phase is made available for the disaster victims in the Staging Areas), and (d) Points of Distribution (PODs)
second phase, and infrastructure rebuilding is the pri- (Afshar and Haghani 2012). Now we discuss these
mary focus of the third phase. The focus of this facilities in detail.
research is on the Response phase, where the logistic
(a) Major Distribution Centers: The MDCs are per-
decisions need to be taken regarding the delivery of
manent distribution centers that are strategically
relief items to the disaster victims.
located throughout the world/country. The aid
The degree of difficulty in providing the logistical
agencies pre-position critical inventories at dif-
response varies on the predictability of the disaster
ferent MDCs. For example, World Vision Inter-
(Apte 2009). In case of predictable disasters (e.g., hur-
national has pre-positioned inventory at three
ricanes, tornadoes, wild fire, and flu), it is possible to
locations in the world: Colorado (USA), Brindisi
plan for a response in advance. Hence, in such disas-
(Italy), and Hanover (Germany) (Beamon and
ters, the aid agencies can properly mobilize the
Kotleba 2006). Similarly, FEMA has nine Distri-
response mechanism on time to cater to the needs of
bution Centers to support the continental US
the situation. The focus of this research is on respond-
and its territories: six in the continental US
ing to such disasters that are predictable in nature.
(Atlanta, GA; Ft. Worth, TX; Frederick, MD;
The various planning activities that the aid agencies
Cumberland, MD; Winchester, VA; and San
perform before a disaster strikes to effectively
Jose, CA), and three in the US territories (Guam,
respond to an incident include (i) identifying the tem-
Hawaii, and Puerto Rico) (Homeland 2009).
porary distribution centers (called the Pre-Staging
These distribution centers contain, among other
Areas), (ii) pre-positioning inventory, and (iii) identi-
items, millions of liters of water and millions of
fying the local resources that can be utilized when the
Meals-Ready-to-Eat packets (Smith 2011).
disaster strikes.
(b) Pre-Staging Areas: The inventory is transported
In order to understand the disaster management
from the MDCs to a temporary pre-staging
process and develop the model, we interviewed
area in anticipation of a disaster. The purpose
several Federal Emergency Management Agency
of the pre-staging area is to enhance the abil-
(FEMA) and state emergency management adminis-
ity of aid agencies to quickly move needed
trators (J. Hall, Texas Division of Emergency
supplies. For example, in March 2011, FEMA
Management; C. Frazier and M. Martinez, Brazos
proactively established a pre-staging area in
County Emergency Management; S. Moffett, FEMA
Minnesota in anticipation of potential flooding
Region 6 External Affairs). Our interactions with the
across the Upper Midwest (Smith 2011). When
practitioners proved very helpful in bringing the
Hurricane Earl hit Houston area, FEMA used
real world aspects into the model and experiments.
the Reliant Stadium for pre-staging (Frazier
Additionally, we studied the related documents
and Weintraub 2013). Similarly, Ford Arena in
released by FEMA and various state agencies (e.g.,
Houston is a designated pre-staging area for
Florida Logistics Technical Bulletin; Oregon SAI
hurricanes (Hall 2013).
Mass Commodities). Thus, through our model and
(c) Staging Areas (SAs): Similar to the pre-staging
experiments, we provide valuable insights that can
areas, the SAs are also temporary locations. A
be used by the managers of logistic operations dur-
set of SAs is pre-identified by federal, state, or
ing disasters.
county governments before the disaster. Once
the disaster strikes, based on the exact location
1.2. Planning and Response Activities for of the disaster, the pre-staging areas are
Disasters selected and established from the set of pre-
We now discuss various activities involved in planning identified locations (Frazier and Weintraub
and response stages of disaster management cycle, 2013, Hall 2013, Kapucu et al. 2007). Then,
specifically those of the government agencies (federal, inventories are moved from the pre-staging
state, and county level) and other aid agencies. In the area to the SAs. Shipping vital supplies from
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 793

these SAs to the affected sites helps to reduce 1.2.2. Last Mile Distribution. In the aftermath of
the lead time and the cost of distribution. In a disaster, the field logisticians make assessment of
case of FEMA, an audit of the pre-identified the affected areas and select the SAs and the PODs
SAs is conducted in the second quarter of from the pre-identified sets (Homeland 2009).
each year to assess its worthiness to be used Depending on the impact of the disaster and the
as a SA. At least three potential SAs are iden- capacities of available SAs (and PODs), more than
tified for each county in the US (Hall 2013). one SA (and POD) may be selected. In principle,
Note that some of the pre-identified SAs may FEMA delivers the materials from the pre-staging
not be available due to the damages suffered area to selected SAs, whereas the last mile distribu-
from the disaster. For example, one of the pre- tion is the responsibility of state and/or county.
identified SAs in the south Jefferson County The initial demand for the relief items are estimated
could not be used when Hurricane Rita struck in the planning phase of the operations. FEMA uses
Houston (Hall 2013). software as HAZUS-MH for estimating the potential
(d) Points of Distribution (PODs): Finally, the aid losses in a disaster (FEMA 2012, Lin et al. 2011). After
is distributed to the affected people at the the disaster strikes, the supplies are delivered to the
PODs. Similar to the SAs, the PODs are pre- SAs (from Pre-Staging Areas) usually within
identified before the disaster but selected after 24 hours, and deliveries to PODs from the SAs are
the disaster. Usually, these sites are selected made usually within the next 96 hours (Florida 2005).
close to the SAs for fast access. However, if The first shipment to PODs from SAs are made based
need arises, these can be as far as 600 miles on the estimation of the demand by the field logisti-
from the SAs (Moffett 2013). Further, PODs cians. Next, the aid agencies perform the needs
should have easy ingress and egress for the assessment for the subsequent days based on the cur-
delivery trucks and private vehicles (Frazier rent burn rate (i.e., consumption rate of relief items) at
and Weintraub 2013). Any area with a large PODs and the estimated demand. For example, in
concrete surface where temporary tents can Texas, Texas A&M Forest Service performs the needs
be erected may serve as PODs. Parking lots in assessment for disasters such as hurricanes and wild-
front of malls, stadiums, and grocery stores fire (Hall 2013). The demand information obtained
are typical candidate locations. from the needs assessment is passed to the SAs. Note
that the needs assessment may result in the revision
Based on the above discussion, a schematic represen- of previously estimated demands. Based on this infor-
tation of a relief supply chain is provided in Figure 1. mation, the SAs deliver supply items to the PODs to
In the context of response phase, the last mile distribu- meet the demand. For details on needs assessment,
tion involves all logistics efforts required for facilitat- the readers can refer to de la Torre et al. (2012). At
ing the movement of relief items from the SAs to the PODs, the supplies are distributed to the disaster vic-
PODs. These include routing, scheduling, and load- tims for typically 12 hours a day. During this period,
ing/unloading of trucks. Next, we discuss the details the key focus of relief personnel is to provide assis-
of operations involved in the last mile distribution. tance to the disaster victims. Hence, in the after-hours,

Figure 1 Representation of a Relief Supply Chain


Points of Distribution
POD 1

Major Distribution Pre-Staging Area Staging Areas


Centers
POD 2

POD 3
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
794 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

the supplies received during the day are prepared for the inherent differences between the supply chains in
delivery on the next day (Hall 2013, Oregon 2013). commercial environment and those in disaster
Based on the above discussion, the timeline of a dis- response environment, these models are not directly
aster management is illustrated in Figure 2. In this fig- applicable in our setting. Altay and Pal (2014) show
ure, the disaster strikes on Day 0, and the relief the value of information in a humanitarian setting.
operations last for H days (from Day 1 to Day H). They also show that the quality of information is criti-
Note that our research concentrates only on the logis- cal for effective resource utilization. Further, as indi-
tic activities involved in the last mile distribution cated by Haghani and Afshar (2009), there is a need of
(from the identification of SAs to the distribution of integrated models in disaster response environments.
relief supplies to the disaster victims). More specifi- Hence, in this study, we propose and study an inte-
cally, the logistic activities inside the shaded box in grated model for facility location and routing with
Figure 2 are the focus of our research. In order to opti- specific attention to quality of demand information in
mize these logistic activities, we develop a mathemat- a disaster response environment.
ical model based on our discussions with the
administrators of FEMA and state emergency man- 1.3.2. Last Mile Distribution Problem. The last
agement agency (Frazier and Weintraub 2013, Hall mile distribution problem in emergency logistics
2013, Moffett 2013), as well as the documents released includes routing and scheduling of delivery vehicles,
by different agencies (Broward 2009, Florida 2005, and transshipment of inventories to the PODs. In this
Oregon 2013). direction, Oh and Haghani (1997) develop heuristics
to solve a multi-transportation mode, multi-commod-
1.3. Literature Review ity disaster relief operation problem. Their objective is
In this subsection, we discuss the related studies. We to minimize the operational costs that include trans-
mainly focus on the following streams of literature portation cost and material cost. The stochastic
that are close to our study: (i) integrated/coordinated version (uncertainties in route capacities and
decision models, (ii) last mile distribution problem, demand/supply) of this model is analyzed by Bar-
(iii) facility location problem, and (iv) vehicle man-
barosoglu and Arda (2004). Yi and Ozdamar (2007)
agement problem. provide a routing model for moving relief supplies
from SAs. Their objective is to minimize the delay in
1.3.1. Integrated/Coordinated Decision Models. The providing emergency supplies, and they use integer
literature that motivates the integrated/coordinated program and fuzzy logic techniques to find optimal
decision problems is rich in a commercial supply solutions. In the similar direction, Yi and Kumar
chain environment (e.g., Dawande et al. 2010, (2007) develop a two-phase optimization model
Rajapakshe , et al. 2013, 2014). However, because of (routing and vehicle assignment) for dispatching

Figure 2 Timeline of Disaster Response

(i) Initial Assessment of the


Impact Area is Conducted
(ii) SAs and PODs are Selected
from the List
(iii) Inventory is Moved from
Pre-Staging Areas to SAs
Disaster Strikes PODs and SAs
Planning Begins in Day 0 Relief Items are Moved are Closed
from SAs to P ODs
Anticipation of a Day 1 Day H+1
Disaster
A List of Possible SAs (i) Relief Items are
and PODs are Made Moved from SAs
Recovery
to PODs,
Begins
(ii) Disaster Victims
(i) Expected Damage is Forecasted, Receive Aid at PODs
(ii) Relief Supplies are Pre-Staged Day 2, ., Day H

Planning Before Disaster Response


Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 795

commodities to affected areas. In their two-phase model, Salmer on and Apte (2010) minimize the
model, the optimal solution from one phase feeds to expected number of casualties. Their first-stage repre-
the second phase. Balcik et al. (2008) also solve the last sents the expansion of resources such as warehouses,
mile distribution problem in two phases. In the first medical facilities with personnel, ramp spaces, and
phase, a list of candidate routes from the SAs to the shelters, whereas the second-stage decisions include
PODs are found, and, in the second phase, delivery the logistics of the problem where allocated resources
routes of each vehicle and the amount of supplies sent and contracted transportation assets are deployed to
on each vehicle to PODs are optimized. While cost is a rescue critical population and deliver required com-
constraint, optimization decisions made solely on the modities to the people who stay-back (e.g., those
cost considerations should not be the prime objective people who remain within the affected areas). They
of humanitarian supply chains. We address this issue provide guidance on how budget allocation needs to
by proposing a value function that aids in treating the be done. We differ from them in proposing an inte-
problem differently from a commercial supply chain. grated model where the objective is to minimize the
Also, by integrating the facility location with the last sum of logistics and social costs. Also, the objective
mile distribution, our proposed model improves the function includes a utility component which ensures
efficiency of the response operations. that the inventory is first allocated to those SAs where
the marginal utility obtained from a unit of inventory
1.3.3. Facility Location Problem. Some of the past is the highest. The logistics costs considered in the
studies also analyze the facility location problems in model include costs of routing and scheduling of
an emergency context. For example, Ukkusuri and trucks. Also, there is a penalty for not satisfying the
Yushimito (2008) solve a facility location problem for demand on time. Overall, our model satisfies the
inventory pre-positioning. Other location decision demand for the relief supplies while ensuring that the
models studied in the humanitarian context are: operational costs are at the minimum level and within
transfer point location problem (Berman et al. 2007), budget.
casualty collection points (Barbaroso glu et al. 2002),
and facility location for medical services (Jia et al. 1.4. Our Contributions
2007). Note that, none of these studies integrate differ- All of the emergency management administrators that
ent components in the response phase of the relief we interviewed suggested that a flexible and realistic
work. We fill this gap by proposing an integrated optimization model for the logistic operations would
model for solving location, stocking, and distribution help to alleviate the difficulties they face in the last
problem, with an emphasis on obtaining a balance mile distribution. In this study, we respond to this
between humanitarian and cost objectives. need by developing a Mixed Integer Programming
(MIP) formulation for optimizing the decisions in the
1.3.4. Vehicle Management Problem. Another last mile distribution. This model is flexible, because
stream of literature that is related to our study is it solves the problem in a rolling-horizon manner with
the vehicle management problem in a disaster envi- the revised state of the system. Also, in the model, we
ronment. In this direction, Eftekhar et al. (2014) consider both humanitarian and cost minimization
study the fleet management problem for Interna- objectives. To resemble the reality, we consider that:
tional Committee for Red Cross. Next, Sodhi and (i) some of the pre-identified SAs may not be available
Tang (2014) propose the use of buttressed supply for operations after the disaster strikes, (ii) there will
chain for distribution of essential goods for flood be uncertainty in demand for the relief items, (iii) dif-
disasters. Transportation of commodities using heli- ferent types of vehicles are available for distribution
copters are studied by Angelis et al. (2007) and Bar- of items, and (iv) the travel time may increase due to

barosoglu et al. (2002). Further, Ozdamar et al. the damaged conditions of roads, bridges, and other
(2004) determine the pickup and delivery schedules infrastructure facilities.
as well as the quantities to be loaded in each vehi- As discussed in the previous subsection, in the con-
cle. Again, none of these studies analyze an inte- text of disaster management, the problems related to
grated model that is the focus of our study. The vehicle routing (aid and emergency), facility location,
readers can refer to Caunhye et al. (2012) and and inventory allocation have been analyzed in isola-

Ozdamar and Ertem (2015) for a detailed study on tion in different studies. These studies provide solu-
the different optimization models in humanitarian tions to the subsystems examined. However, since all
and emergency logistics. of these logistic activities are interconnected, optimal
Research studies described above identify the need solution for one activity may not be efficient for the
for an integrated approach in designing the logistics whole logistic system. Therefore, the focus of this
systems. Using a two-stage stochastic optimization study is to present an integrated model. Our model
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
796 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

helps in providing efficient and flexible solutions to required for carrying out the response opera-
the following problems encountered in the last mile tions.
distribution: What are the right sizes (in terms of storage

Selecting the staging areas: Once the PODs are


capacities) of SAs closer to the PODs? For this
study, we compare different configurations of
identified by the emergency management
SAs that are defined based on the sizes and
personnel, the SAs need to be selected while
the distances from the PODs. This analysis
considering the humanitarian and pecuniary
would help planners in selecting the right
measures. The proposed model finds the opti-
choices of facilities at the right locations.
mal location of SAs from the pre-determined
list. The optimal locations help in getting the How should the budget be allocated in a disas-
ter scenario? In order to answer this question,
relief supplies to the victims on time.
Allocation of inventory: Along with the selec-
we conduct extensive sensitivity analysis on
budget for multiple settings. This question has
tion of the SAs, the logisticians need to allocate
significance in a humanitarian environment,
inventory of supply items to the opened SAs
because a logistician needs to know the mar-
from the pre-staging areas. The proposed
ginal improvement in the humanitarian value
model provides the optimal allocation of
with each additional increase in the logistic
inventory to each selected SA on each day. In
budget.
disaster management, the humanitarian objec-
tive is to meet demand in a timely manner. If What mix of different types (in terms of sizes)
of trucks should be selected in a given scenar-
more inventories are stored at SAs closer to
io? By performing sensitivity analysis on truck
PODs, the demand may be satisfied in a more
sizes, we obtain the best combinations of
timely manner because of lower transportation
trucks that can reduce the operational cost in a
time. Hence, we use a value function in our
given scenario.
model that favors storing more inventories clo-
ser to PODs. However, the closer locations The rest of this study is organized as follows. The
may have higher operational costs. Our model next section provides a detailed description of pre-
also balances this trade-off between the paredness and response phase of the disaster man-
humanitarian objectives and the operational agement. An integrated MIP formulation and solution
costs. methodology are provided in section 3. The experi-
Routing of trucks: The solution of our model mental setup is detailed in section 4. Based on the
also provides the optimal routing of trucks results of our model, we present several useful man-
while delivering supply items from the SAs to agerial insights in section 5. Finally, section 6 con-
the PODs. The efficient routing of trucks helps cludes the study and provides directions for future
in not only meeting the demand in a timely research.
manner, but also in reducing the overall cost
of transportation.
2. Problem Description
Demand uncertainty: One of the main chal-
lenges in the last mile distribution problem is The decisions taken in the response phase of disaster
the inability to predict the demand much in management are impacted by the logistic activities
advance. We address this issue by modeling involved in the preparedness phase. Hence, although
the problem in a rolling-horizon manner. The the focus of this study is on the response phase, it is
demand is updated on a daily basis and the important to understand the activities of the pre-
problem is resolved based on the updated paredness phase. Therefore, before presenting the
demand. This way, we limit the uncertainty in model, we briefly discuss both of these phases.
demand to one day.
2.1. Preparedness Phase
Based on the solution of the integrated model dis-
In this section, we discuss the decisions taken by
cussed above, we also provide answers to the follow-
humanitarian organizations during the preparedness
ing questions that are useful for the logistic managers:
phase.
What is the minimum budget required for
effective response operations? To answer this 2.1.1. Supply Items. The types of supply items
question, we run the experiments with differ- include both the infrastructure items (such as tents,
ent budget values by holding the other param- tarps, blankets, and temporary shelters) and the
eters constant. The resulting insights would commodities with limited shelf life (such as food,
help the planners to find the minimum budget medicine, and hygiene kits). The humanitarian orga-
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 797

nizations usually pack all of the items of one type in a ments help in improving the efficiency of routing sup-
kit (Apte 2009, McCall 2006). For example, one kit plies to the PODs. For illustration, an example of
may contain all infrastructure items, whereas another distribution scheme is shown in Figure 3. In this fig-
kit may contain all commodities with limited shelf ure, direct shipments are shown as bold arrows, and
life. Therefore, the types of supply items are defined transshipments and returns are shown as dotted
at the kit-level. We denote the set of the types of items arrows. The circles in the figure represent the SAs.
(or the kits) by K. Since different types of items Different types of trucks, with different capacities,
require different storage requirements, they are usu- are usually available. We denote the set of the types
ally stored separately in SAs and PODs (Hall 2013). of trucks by N. In the preparedness phase, the human-
Also, because of the same reason, only one type of itarian organizations plan for a number of trucks of
item is usually transported in a truck at any time. different types based on availability. In order to keep
our model general, the costs of operating different
2.1.2. Pre-Identification of SAs and PODs. As types of trucks are considered to be different. For
discussed earlier, sets of potential SAs and PODs are truck type n, let the fixed cost be Cn , the capacity be
pre-identified in the preparedness phase. Let L0 and S0 cn , the total number available be hn , and the cost of
be these sets of potential SAs and PODs, respectively. travel between SA (or POD) i and SA (or POD) j be
Next, we denote the distance between SA (or POD) i B0ijn . In addition, we define Ong 1 if the truck g is of
and SA (or POD) j as e0ij . Depending on the distances type n; otherwise it is 0. All the parameters estimated
e0ij and the routing schedule, the trucks may be able to in the preparedness phase are summarized in Table 1.
make multiple trips in a day. In order to facilitate this,
we divide a day into multiple travel intervals denoted 2.2. Response Phase
as p, p = 1, 2, . . ., P. The travel and loading/unload- After the disaster strikes, an assessment needs to be
ing time between SA (or POD) i and SA (or POD) j is done in order to investigate whether a pre-identified
defined in terms of these travel intervals as d0ij . SA can be used for the last mile distribution. Hence,
Further, for SA i, the fixed cost is denoted by Fi , and following a disaster, the field logisticians from
the handling cost per unit of item type k is denoted by humanitarian organizations conduct a rapid environ-
Vik . The fixed cost represents the cost of operationaliz- mental impact assessment. In the case of International
ing the SA, and the handling cost includes the costs Federation of Red Cross (IFRC), the Field Assessment
associated with holding and processing items. Finally, Coordination Team (FACT) is responsible for the
Uik denotes the capacity of SA (or POD) i for item type k. assessment of needs and availabilities of resources
following a disaster (Samii et al. 2002). This assess-
2.1.3. Trucks and Distribution Scheme. Usually ment helps them in identifying the status of roads,
the PODs are accessible from the SAs through road, bridges, buildings, and other infrastructure facilities,
and therefore trucks are considered as the mode of and the demand for various essential items (IFRC
transportation. The trucks transport inventory either 2000, Kelly 2003).
(i) between two SAs or between two PODs (transship- Some of the SAs and PODs, identified in the pre-
ments), or (ii) from a SA to a POD (direct shipments), paredness phase, might become unusable due to
or (iii) from a POD to a SA (returns). The transship- damages caused by the disaster. Therefore, a list of

Table 1 Parameters Estimated in Preparedness Phase


Figure 3 An Example of the Distribution Scheme
2
K Set of the types of items
L0 Set of potential SAs identified in the preparedness phase
POD 2
POD 1
S0 Set of potential PODs identified in the preparedness phase
9
eij0 Distance between SA (or POD) i and SA (or POD) j
P Number of travel intervals in a day
5
dij0 Travel and loading/unloading time (in terms of travel
6
intervals) between SA (or POD) i and SA (or POD) j
8
Fi Fixed cost of SA i
1
POD 3 Vik Handling cost per unit of item type k at SA i
3
Uik Capacity of SA or POD i for item type k
4 N Set of the types of trucks
7
Cn Fixed cost of truck type n
0
Bijn Cost of travel for truck type n between SA (or POD) i
POD 4
and SA (or POD) j
Transshipments / Returns
hn Total number of vehicles available of type n
Direct shipments cn Capacity of truck type n
Staging Areas Ong =1, if truck g is of type n; otherwise 0
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
798 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

available and usable SAs and PODs is prepared that ser to the PODs. One component of our objective is to
can meet the last mile distribution requirements. The maximize this value function, which favors the alloca-
inventory from distribution centers and/or pre-sta- tion of more inventory at the SAs closer to the PODs.
ging facilities are moved to these selected SAs. The The addition of this value function in the objective is
supply items are then delivered to the available PODs consistent with the earlier discussion that the objec-
from these SAs (see Figures 1 and 2). For IFRC, the tives in a humanitarian supply chain must be differ-
Emergency Response Units (ERUs) act on the needs ent from those in a traditional supply chain in order
assessment from the FACT and distribute goods to to obtain desired results (Carroll and Neu 2009,
the needy (Samii et al. 2002). The unavailability of Holgu-Veras et al. 2012).
some of the roads after disaster may also change the Capturing risk and equity in a non-humanitarian
distances, the travel times, and the costs of travel context has been studied mostly from the perspective
between some of the SAs and the PODs. In Table 2, of a strategic decision maker. For example, Fishburn
we summarize the list of parameters that need to be (1984), Keeney (1980), Keeney and Winkler (1985),
revised in the response phase. and Sarin (1985) study distribution of public risks
caused by private or government projects. However,
2.2.1. Penalty and Value Function. The PODs the findings in the above research are not directly
communicate the daily demand of the items to the applicable to the logistical problem that we study in
SAs, and the demand is expected to be met before the this research. From a humanitarian perspective,
end of the specified day. If the total supplies from the Holgu-Veras et al. 2012) discuss the various social
SAs do not meet the demand for an item in a given objective functions studied in the humanitarian litera-
day, that portion of the demand is considered as ture. They also derive an exponential deprivation cost
unsatisfied, but not lost. The unsatisfied demand of function based on the past data. On the similar line,
each day must be satisfied as much as possible in the we propose a value function that decreases exponen-
coming days (we also present a modified model for tially with the distance from the POD and the han-
situations where demand cannot be satisfied in a later dling cost. More specifically, the value obtained from
period). We consider a penalty cost for not satisfying storing a unit of inventory at SA i for POD s and item
each unit of demand that depends on (i) the type of type k is
item, (ii) the day in which the demand is not satisfied,  
 1
and (iii) the POD at which the demand is not satisfied. uisk  1  e aVik beis : 1
Let skt denote the penalty (normalized in $) for each
unit of unsatisfied demand for item type k on day t at Recall that Vik is the handling cost of holding and
POD s. processing one unit of item k at an SA i, and eis is the
The priority of the disaster manager must be to distance from an SA i to POD s. Further, a is the
meet the demand on time, otherwise human suffering weight factor for handling cost, b is the weight factor
will increase. Hence, the on-time delivery must be for distance, and e is the multiplier. Note that a, b,
given priority over the cost. If not careful, the optimal e > 0. The a, b, and e values are dependent on the
solution will minimize the cost by choosing SAs that severity of the impending crisis. Therefore, these
are far away from PODs because they usually have parameters are usually estimated based on the deci-
the lower operating cost. One of the ways to meet sions of managers regarding the selection of an SA i
demand on time is by carrying enough inventory at (given its cost and distance, that is, Vik and eis , respec-
SAs closer to the PODs even when their operational tively) in a similar crisis in the past. However, since
costs are higher. In order to achieve this, we introduce each crisis is unique, the past data is used in conjunc-
a value function in our objective. This value function tion with additional data regarding the impending
is defined as a function of the operating cost and the crisis. This additional data is obtained by talking to
time required traveling from an SA to the PODs. More logistic managers who have knowledge on the geog-
specifically, it is comparatively higher for the SAs clo- raphy of the area and the probable damage from the
impending disaster. The past data and the newly
gathered data can be used for estimating a,b, and e.
Table 2 Parameters Revised in Response Phase
For example, Holgu-Veras et al. (2012) present an
L Set of available SAs, L  L0 exponential model to estimate the parameters for a
S Set of available PODs, S  S 0
deprivation cost function.
eij Distance between SA (or POD) i and SA (or POD) j, eij  eij0
dij Travel and loading/unloading time The behavior of the value function is explained
(in terms of travel intervals) between SA using an example in Table 3. In this example, we con-
(or POD) i and SA (or POD) j, dij  dij0 sider one type of item (say, k), one POD (say, s), and
Bijn Cost of travel for truck type n between SA
0
set a = .004, b = .03, and e = 1. Using these values,
(or POD) i and SA (or POD) j, Bijn  Bijn
Table 3 presents the values of uisk for different combi-
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 799

Table 3 Illustration of the Behavior of Value Function Table 5 Variables Used in the Model
0
Handling cost (Vik ) Distance (eis ) Value function (uisk ) Dskt Total demand for item type k on Day t of response at POD s.
It is the sum of the current days demand and any unsatisfied
0.25 59 0.43
demand from previous days
1.00 69 0.38
Dsktp Demand of item k served at POD s on Day t and travel interval p
5.00 116 0.25
Xi =1, if the ith SA is open; 0 otherwise
5.00 162 0.19
Iiktp Inventory of item type k at SA i at the end of travel interval
1.00 218 0.14
p on Day t
0.25 279 0.11
Isktp Inventory of item type k at POD s at the end of travel interval
1.00 400 0.08
p on Day t
5.00 565 0.06
Rnijtp Number of trucks of type n traveling from SA (or POD) i to SA
0.25 729 0.04
(or POD) j in the beginning of travel interval p on Day t
Qnitp Number of trucks of type n available at SA (or POD) i on
Day t at the end of travel interval p
nations of Vik and eis . It is easy to observe that the Pgijktp Amount of item type k carried in truck g that is starting from
SA (or POD) i to SA (or POD) j at the beginning of travel
higher value is obtained in those cost-distance combi-
interval p on Day t
nations where the distance is lower. Wskt Unsatisfied demand for item type k at POD s on Day t
sijktp Shipment quantity for item type k from i to j at the beginning
2.2.2. Other Parameters Estimated in the of travel interval p on Day t
Response Phase. Let Dskt be the demand of item type ygijtp = 1, if truck g starts traveling from i to j at the
beginning of travel interval p on Day t; 0 otherwise
k on Day t at the POD s. Let H be the number of days
Ugitp = 1, if truck g is available at SA i at the end of travel interval
the response operations last. Finally, the humanitar- p on Day t; 0 otherwise
ian organization needs to allocate the budget based qgijktp =1, if item k is carried in truck g that is starting from SA
on the impact of disaster. We denote this operating (or POD) i to SA (or POD) j in the beginning of travel
budget as in our model. The new parameters esti- interval p on Day t; 0 otherwise
mated in response phase are summarized in Table 4.

Table 6 Illustration of the Nomenclature, H = 6


3. Formulation and Solution
Run Decision point Estimated demand Movement Distribution
Methodology r Day Days Day Day
In a disaster environment, the demand for the relief 1 0 2 3 4 5 6 1 2
supplies are uncertain. Therefore, to reduce the 2 1 2 3 4 5 6 2 3
demand uncertainty, the optimization needs to be 3 2 3 4 5 6 3 4
4 3 4 5 6 4 5
done frequently (say, once per day) with newly esti-
5 4 5 6 5 6
mated demands. Furthermore, distributing supplies
on time to the beneficiaries is one of the biggest chal-
lenges in disaster management.
(i.e., the value function). The variables used in the for-
We now present the MIP formulation to optimally
mulation are summarized in Table 5.
determine the following: (a) selection of usable SAs,
As discussed earlier, the optimization is run in a
(b) assignment of inventory to the SAs, (c) selection
rolling-horizon manner. On each day, we solve the
and assignment of different types of trucks to those
optimization problem for the remaining days in the
facilities, (d) transshipments between two SAs or
problem horizon based on the current inventory sta-
between two PODs, (e) shipments to the PODs, and
tus and the updated demand. We then implement the
(f) returns of trucks and items from the PODs to the
solution for the current day and repeat the process for
SAs. The objective is to minimize the sum of the logis-
the next day. Below, we introduce the nomenclature
tics costs, the penalty costs (for not meeting the
associated with the optimization. Table 6 illustrates
demand on time), and the negative of the value
this nomenclature for H = 6 days.

derived from allocating inventory closer to the PODs
Run (r): In each run, we solve the problem for
the remaining days in the planning horizon.
Table 4 New Parameters Estimated in Response Phase Thus, there are H  1 runs for the entire plan-
ning horizon. Recall that the facilities are estab-
Dskt Demand of item type k on Day t at POD s
H Planning horizon (number of days for which the
lished on Day 0, the items are transported
response operations last) from Day 1 onwards, and the demand is satis-
skt Penalty for each unit of unsatisfied demand for fied from Day 2 onwards (see Figure 2).

uisk
item type k on Day t at POD s
Value function of SA i for POD s and item type k
Decision Point: Decision point refers to the end
of the day on which the demand estimation is
Allocated operating budget
done for the remaining days in the planning
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
800 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

horizon. Hence, as shown in Table 6, there are X H X


X
H  1 decision points. IikaP  Dskt  Mh  1 8k 2 K
Movement: It refers to the day on which the i2L[S
X
ta1 s2S
H X
X
movement of goods from the SAs to PODs
happens for an optimization run. The move- IikaP  Dskt  Mh 8k 2 K
i2L[S ta1 s2S
ment happens the day after the decision point. !
Hence, as shown in Table 6, the item move- X H X
X X
ment happens on Day 1,2, . . ., 5 for a problem fika  Dskt  IikaP 1  h 8k 2 K
i2L ta1 s2S i2L[S
with H = 6. With the estimated demands in !
the first run (r = 1), the SAs are located on Day X X X
H X
fika  Dskt  IikaP  Mh 8k 2 K
0 and items are moved to PODs on Day 1. i2L i2L[S ta1 s2S
From the second run onwards, the Decision
Iika10 IikaP fika 8i 2 L; 8k 2 K
Points are on Day a (=r  1), and items move
on Day a, where a = 1, 2, . . ., H  1. Iikt0 Iikt1P 8i 2 L [ S;
Distribution: As discussed earlier, in the after- t a 2; a 3; . . .; H; 8k 2 K
hours, the supplies received during a day are
fika  0 8i 2 L; 8k 2 K
prepared for delivery on the next day (Hall
2013, Oregon 2013). Hence, as shown in Next, constraint set (A.3) is replaced by the follow-
Table 6, the items are distributed to disaster ing set of constraints:
victims at PODs on Day 2, 3, . . ., 6 for a prob-
lem with H = 6. D0ska1 Dska1 8s 2 S; 8k 2 K
The formulation for Day 0 (i.e., Run 1) is presented
in Appendix S1. In this formulation, a = 0. The objec- For constraint sets (A.4)(A.7), the constraint
tive of the MIP is to simultaneously minimize the remains the same, but the range of t needs to be
operational cost and the penalty cost due to unsatis- modified as follows: For constraint set (A.4), the
fied demand, and maximize the value obtained from new range of t is a + 1, a + 2, . . ., H  1, and for
keeping inventory at the SAs closer to PODs. The total constraint sets (A.5)(A.7), the new range of t is
operational cost is the sum of the cost of operationaliz- a + 1, a + 2, . . ., H. Further, constraint set (A.8)
ing SAs, the handling cost of inventory in all SAs, needs to be modified as:
the costs of transshipments, direct shipments, and the Iika10  Uik Xi 8i 2 L; 8k 2 K
returns of trucks from the PODs to the SAs, and
the fixed cost of the selected trucks. The detailed Constraint sets (A.9)(A.12), (A.14)(A.15), (A.18)
discussion of the constraint sets is provided in (A.30), and (A.33) remain unchanged, whereas
Appendix S1. (A.13) and (A.32) need to be removed. Constraint sets
(A.16), (A.17), and (A.31) are replaced by Equations
3.1. Optimization Problem for Day a; (2)(6) as explained below. The truck g may be at one
a = 1, . . ., H  2 of the SAs or PODs at the end of Day a. Let Y
As discussed earlier, the previous formulation is only f1; 2; . . .; Rn2N hn g denote the set of all trucks, and
for Day 0. At the end of each day, we estimate the A fg : UgiaP 18i 2 L [ Sg denote the set of assi-
demand for the remaining days in the planning hori- gned trucks until Day a. Let F nia  0 denote the
zon. The newly estimated demand for a day may be number of new trucks of type n need to be assigned to
different from the earlier estimate. Hence, extra an SA i.
inventory may need to be assigned to the SAs. There-
X X
fore, we run the optimization model at the end of each F nia  hn  QniaP 8n 2 N 2
day for optimally allocating any extra inventory i2L i2L[S
needed at the SAs, and for routing trucks. The follow- X
ing constraint sets calculate the extra inventory F nia UgiaP Ong 8i 2 L; 8n 2 N 3
needed. These constraints replace constraint sets (A.2) g2YA
and (A.11) of the earlier formulation. For Day a, let
h = 1 if Ri2L[S IikaP  RH
ta1 Rs2S Dskt ; 0 otherwise. Also,
Qnia10 QniaP F nia 8i 2 L; 8n 2 N 4
let fika  0 denote excess inventory (if any) needed
at an SA i for item type k. Since IikaP is the inventory Qnit0 Qnit1P 8n 2 N;
5
at the end of Day a from the previous optimization 8i 2 L [ S; t a 2; a 3; . . .; H
run, it is a parameter for the optimization problem of
Day a. F nia  0 8i 2 L; 8n 2 N 6
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 801

Now, we revise the budget constraint (A.1) as travel intervals. The PODs typically operate only for
follows. The budget utilized before the problem the first 37 days of an event (Florida 2009). Hence,
is solved on Day 1 is: x1 Ri2L Fi Xi Ri2L we consider H = 6 in our experiments. The first opti-
Rk2K Vik Iik0P Rn2N Ri2L[S Rj2L[S RPp1 Bijn Rnij1p Rn2N mization is run with estimated demands from Day 2
j6i
to Day 6. For the subsequent runs (on each day), the
Cn Ri2L Qni0P . The SAs selected on Day 0 remain demand estimate is revised for remaining days, and
the same for the rest of the planning horizon. the proposed optimization model is solved by updat-
Hence, Xi s become parameters for the succeeding ing the parameter values based on the revised
runs. Therefore, the budget utilized before the demand estimate for remaining days and the actual
problem is solved on Day a (a = 2, . . ., H  2) can demand realization until the time of optimization.
be recursively written as: Hence, as shown in Table 6, we have a total of five
optimizations runs for each problem class.
xa xa1 Ri2L Rk2K Vik fika1
The number of PODs usually vary based on the nat-
Rn2N Ri2L[S Rj2L[S RPp1 Bijn Rnijap ure of the disaster. However, for many predictable
j6i

Rn2N Cn Ri2L F nia1 : disasters in Texas, the number of PODs is typically 2


to 3 (Hall 2013). Hence, in our experiments, |S| = 2.
Hence, the budget constraint (A.1) is rewritten as: Similar to Balcik and Beamon (2008), we broadly clas-
XX XX X X H X P sify the supply items into two types: Type 1 and Type
Vik fika Bijn Rnijtp 2. Type 1 items include the infrastructure items such
i2L k2K n2N i2L[S j2L[S ta1 p1 as tents, tarps, blankets, and temporary shelters that
! j6i
help in setting-up the PODs. On the other hand, Type
X X
Cn F nia  n  xa 2 items include commodities with limited shelf life
n2N i2L such as food, medicine, and hygiene kits.
The demand for the items at PODs are higher in the
Finally, the revised objective function is:
first few days after a disaster, and it decreases as the

2 3
!
6X X XX X X
H X
P X X XX X
H XXX 7
min6
4 V ik f ika B ijn R nijtp C n F nia skt W skt  uisk fika 7
5
i2L k2K n2N i2L[S j2L[S ta1 p1 n2N i2L s2S k2K ta1 k2K i2L s2S
j6i

The formulation above assumes that if the demand days progress (Frazier and Weintraub 2013). We cap-
is not satisfied on a day, it needs to be satisfied on a ture this behavior in the initial estimates of demand at
future day in the planning horizon. However, if vic- POD 1 that are presented in Table 7. In this table, the
tims do not return to the PODs on a future day the demand at POD 2 is estimated as follows: the demand
unfulfilled demand remains unsatisfied. We have dis- for Item 1 is 90% of its demand at POD 1, and the
cussed such a scenario in section 6. demand for Item 2 is 110% of its demand at POD 1.
The estimates presented in Table 7 are the initial esti-
mates, and therefore these are used only for the first
4. Experimental Setup optimization run (on Day 0). The demand for subse-
The goal of this section is to present our experimental quent optimization runs are estimated as follows. Let
setup. Here, we discuss how the dataset is generated and t denote the day on which the optimization is
in order to obtain meaningful insights from the exper- run and the day for which the demand is forecasted,
iments. We begin with the discussion of demand for respectively; = 1, 2, . . ., 4; t = + 1, + 2,
different types of items. . . ., 6. The forecasted demand for the items at POD 1
are generated randomly from a uniform distribution:
4.1. Demand D1t UD11t  e1t D11t ; D11t e1t D11t . Since
The total time for delivery of supplies (including tra- it is more difficult to forecast farther into the future,
vel and load/unload time) from the SAs to the PODs the variance of this distribution should increase with
is typically around 4 hours or more (Moffett 2013). (t  ). Therefore, based on our discussions with
Further, at PODs, the supplies are distributed to the emergency management administrators, we set
disaster victims for usually 12 hours a day (Hall 2013, e1t 0:04t  1. Also, the realized demand is con-
Oregon 2013). Hence, we divide a day into P = 3 sidered to be 10% of the forecasted demand. Hence,
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
802 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

Table 7 Demand Estimates for the First Optimization Run (on Day0)

Day 2 Day 3 Day 4 Day 5 Day 6

Items POD 1 POD 2 POD 1 POD 2 POD 1 POD 2 POD 1 POD 2 POD 1 POD 2
1 5000 4500 5000 4500 4300 3870 3200 2880 2500 2250
2 3500 3850 3000 3300 2800 3080 2000 2200 1000 1100

Table 8 Penalty for Each Type of Items on Each Day

Day 2 Day 3 Day 4 Day 5 Day 6

Items POD 1 POD 2 POD 1 POD 2 POD 1 POD 2 POD 1 POD 2 POD 1 POD 2
1 1500 1500 1500 1500 1200 1200 1000 1000 500 500
2 1000 1000 800 800 500 500 400 400 300 300

for each period, we consider five demand realizations Table 9 Parameter Values for Staging Areas
based on random draws from a uniform distribution Distance Travel and Handling cost (Vik )
in this range (i.e., 10% of the forecasted demand). loading/
Next, in Table 8, we present the values of penalty Staging unloading Fixed
skt for each k and t at s = 1, 2. This penalty represents Area (i) (ei1 ) (ei2 ) time (dis ) cost (Fi ) Type-1 item Type-2 item
a surrogate cost incurred by the organization for not 1 59 53 1 10,000 5.0 5.0
satisfying the demand in a timely manner. Since the 2 69 73 1 9452 4.5 4.5
3 218 223 2 2634 2.5 2.5
initial days after a disaster are critical (Hodge 2010), 4 273 275 2 2556 2.0 2.0
we consider higher penalty for not satisfying the 5 472 465 3 1933 0.40 0.40
demand in the initial days compared to those for the 6 512 511 3 1675 0.35 0.35
later days. As we discuss later in section 5, penalty
values given in Table 8 do not affect the managerial
insights of the study. Hence, we need not worry about 8 hours of travel and loading/unloading time from
the actual values used for the experiments. the PODs. In our example, the cities in zone 2 are Lit-
tle Rock, AR, and Richardson, TX. Finally, for zone 3
4.2. Staging Areas and Points of Distribution locations, travel and loading/unloading times are 8
As discussed earlier, we have |S| = 2 in our experi- 12 hours. In Figure B1, the cities in zone 3 are Monroe,
ments. For the illustration of SAs, let us consider the LA, and Cleveland, WI.
midwestern region of the United States. In Figure B1 In our experiments, we consider three sizes for the
(in Appendix S2), there are two PODs in Joplin, MO SAs: Small, Medium, and Large. For deriving mean-
(in the center of the figure). The travel and loading/ ingful insights, we further group all SAs of similar
unloading times from the SAs to the PODs are sizes in a zone. Hence, we obtain six configurations of
divided into three zones. We consider two possible warehouses for the experiments: SML, SLM, MLS,
SAs each in zone 1, zone 2, and zone 3 (total six loca- MSL, LMS, and LSM. Here, SML denotes that the
tions). Therefore, |L| = 6 in our experiments. The dis- small size SAs are in zone 1, medium size SAs are in
tances of potential SAs from the PODs are obtained zone 2, and large size SAs are in zone 3. The other
from Microsoft MapPoint. In our experiments, the far- configurations are defined similarly. Further, as dis-
thest SA is at approximately 512 miles from the cussed earlier, the SAs closer to the disaster locations
PODs, and the nearest SA is at around 53 miles. These have higher fixed and handling costs.
distances are consistent with our earlier discussion
that the PODs are selected close to the SAs, but can be 4.3. Trucks
opened as far as 600 miles (Moffett 2013). The truck types represent the capacities of trucks. In
The fixed and the handling costs of operating SAs, practice, the trucks are available in certain standard
as well as distances and travel times, are given in capacities (Robinson 2012). Hence, for our experi-
Table 9. Since each travel interval has 4 hours, all ments, we categorize the trucks in three types accord-
locations are within one, two, or three travel intervals ing to their capacities: large, medium, and small size.
from PODs. Zone 1 includes all SAs within 4 hours of Here, the 53 feet trailer, with a capacity of 4000 cubic
travel and loading/unloading time. In Figure B1, the feet, is an example of a large size truck. The medium
SAs in zone 1 are Springfield, MO, and Kansas City, size truck is typically a 45 feet trailer, and the small
KS. Similarly, zone 2 includes possible SAs at 4 size truck is a 20 feet trailer. The capacities of medium
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society 803

Table 10 Parameter Values for Trucks Problem 1 and Problem 2. Specifically, the average CPU
Total number Fixed
times for Problem 1, Problem 2, and Problem 3 are: 6324,
Type of truck (n) Capacity (cn ) available (hn ) cost (Cn ) 1886, and 1519 seconds for the LMS configuration;
Type 1 (Large) 4000 3 40
and 6046, 3300, and 793 seconds for the SML configu-
Type 2 (Medium) 3000 4 30 ration, respectively.
Type 3 (Small) 2000 5 20
5.1. Sensitivity to Budget Allocation
We begin by analyzing the impact of operational bud-
and small size trucks are usually 3000 and 2000 cubic get on the solution. In our experiments, initially we
feet, respectively (Robinson 2012). The details regard- increment the budget level in small arbitrarily chosen
ing truck capacities, transportation costs, and avail- intervals in the range of $35,000$40,000 (i.e., $35,000,
abilities are provided in Table 10. $36,000, $39,000, and $40,000) to study how the opera-
tional cost and the value function change with bud-
get. Then, we consider two higher budget levels (i.e.,
5. Discussion and Managerial Insights $55,000 and $75,000) that seem reasonable to examine
The goal of this section is to present useful guidelines whether the pattern and insights are valid at higher
for managers using the optimal solution obtained budget levels. For each problem class (Problem 1, Prob-
from the MIP formulation presented in section 3. As lem 2, and Problem 3) and a budget level, we consider
discussed earlier, the optimization model is run 5 five demand realizations (as discussed in section 1).
times in a rolling-horizon manner for each problem For each budget level, there are four runs (as
set. Before each run, we record the available budget explained in sections 3 and 4) and six problem config-
and the status of inventory and trucks. For brevity, urations (LMS, LSM, MSL, MLS, SML, SLM). How-
we confine our discussions to SML and LMS configu- ever, as discussed earlier, we report the results for
rations, because the insights obtained from these con- only two configurations (SML and LMS). Hence, in
figurations hold for other configurations as well. For summary, we report the results for 6 9 3 9
each problem set, we run three problem classes 5 9 4 9 2 = 720 problem instances. For each parame-
named Problem 1, Problem 2, and Problem 3. ter setting, we present the average of the five demand
realizations.
Problem 1: It depicts a situation in which the impact
of the disaster is low and the time to reach
5.1.1. Minimum Budget Required. One of the
the PODs from the staging areas are as discussed
challenges faced by the emergency management
in the previous section. The value function
administrators is to find the minimum budget
parameters for Problem 1 are a = 0.3, b = 0.04, and
required to sustain operations for the entire duration
e = 7.
of the relief operations. The solution of our model
Problem 2: It represents medium impact disasters.
will help them in finding this amount, which may
The time to reach the PODs increase as a result of
be used by the administrators to request funding
the destruction level. In order to account for this
from appropriate authorities. For example, the
increase, we consider two SAs in zone 1 (similar to
behavior of operational cost is shown in Figure 4. In
that in the previous problem), one SA in zone 2 (in
this figure, the budget is plotted on the x-axis and
place of two SAs in the previous problem), and
the total operational cost on the y-axis. All problem
three SAs in zone 3 (in place of two SAs in the pre-
classes have different budget levels at which the
vious problem). The value function parameters for
solution to the problem becomes feasible. In our
Problem 2 are a = 0.03, b = 0.004, and e = 8.
experiments, that level is between $32,734 and
Problem 3: The high impact disasters are represented
$34,980. The minimum budget level required for fea-
using Problem 3. The time to reach the PODs are
sible operations is also presented in Table 11.
the highest as a result of the destruction level. In
Clearly, these budget values represent the minimum
order to account for this increase, the SA distribu-
budget to obtain feasible solutions for the respective
tion over zones 1, 2, and 3 are considered one,
problems. Therefore, based on the estimates before
one, and four, respectively. The value function
the disaster strikes, the emergency management
parameters for Problem 3 are a = 0.003, b = 0.0004,
administrators may use the solution of the proposed
and e = 10.
model to determine and convincingly present the
We solve these problems, using CPLEX Concert minimum budget requirement. This is an important
Technology on a Lenovo laptop computer with Win- result for the emergency management administra-
dows 8.1, Intel i7 processor, and 8 GB of installed tors, because it is usually difficult to credibly present
RAM. When the value function is high (i.e., Problem the minimum budget requirement for carrying out
3), the computation time is less compared to those for the operations.
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Figure 4 Impact of Budget on Operational Cost

(a) (b)

(c)

Table 11 Minimum Budget Level for Feasibility


function attain a steady state. Figure 4 also shows that
Problem 1 Problem 2 Problem 3 the difference between the operational costs of LMS
SML $32,734.00 $33,126.60 $34,061.50 configuration and SML configuration depends on
LMS $33,116.00 $34,263.00 $34,980.00 both the impact level of disaster and the budget level.
Specifically, for higher impact disasters (i.e., Problem
3), both configurations have almost the same opera-
For the rest of the discussion, we assume that the tional cost (at any level of budget). However, for low
budget is sufficient to carry out the relief operations. and medium impact disasters (i.e., Problem 1 and
Problem 2), the LMS configuration has higher opera-
5.1.2. How the Operational Cost and the Value tional cost at the higher level of budget. At the lower
Function Change with Budget?. Figures 4 and 5 level of budget, both configurations have almost the
show that both LMS and SML configurations behave same operational cost (for any impact of disaster).
in a similar manner for all the disaster impact levels: Further, as shown in Figure 5, the LMS configuration
As the budget value increases, both the operational has higher value function than that for the SML con-
cost and the value function first increase and then figuration. Hence, choosing the right configuration of
remain steady. These results can be explained as fol- SAs is critical for the effectiveness of the last mile
lows. After the feasibility point of the budget, more distribution. Other considerations in choosing the
budget is used to store items at SAs closer to the configuration should be based on the criticality of
PODs for improving the value function. Hence, both delivering items on time, which depends on the nat-
the operational cost and the value function initially ure and impact of the disaster.
increase with the budget level. However, there exists These results provide several useful managerial
a saturation level after which more budget cannot insights: (i) In both configurations, there exists a mini-
improve the value function. Hence, after the satura- mum budget level for the feasibility of logistics opera-
tion level, both the operational cost and the value tions below which the demand is not satisfied. If the
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
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Figure 5 Impact of Budget on Value Function

(a) (b)

(c)

budget is more than this minimum budget level, the 5.1.3. Behavior of the Components of the
model strikes a balance between the operational cost Operational Cost. We now analyze each component
and the value function. (ii) In the feasible region, both of the operational cost (i.e., fixed cost of the selected
configurations satisfy demand equally at each level of SAs, handling cost of storage at these SAs, fixed cost
disaster. However, as evident from the value func- of the selected trucks, and transportation cost). The
tions, the LMS configuration provides higher humani- results are presented in Figures 6, 7, 8, and 9. In these
tarian value. In order to do so, the LMS configuration figures, all individual costs are plotted on the y-axis.
usually incurs more operational cost. But, interest- Interestingly, in Figures 69, it is easy to observe
ingly, in some cases (e.g., when the impact of disaster that the individual components of the operational cost
is high or the budget level is low), the LMS configura- do not vary significantly across the two configura-
tion is able to improve the value function even by uti- tions when the budget is low. As discussed earlier, at
lizing almost the same operational cost as the SML low budget, the main goal is to satisfy as much
configuration. Also, as expected, more budget is demand as possible because of the high penalty, and
utilized in the higher impact disasters (for both con- therefore all of the operational budget is used to meet
figurations). (iii) The organizations need to make a the demand. Even though the operational cost is
trade-off between the operational budget and the effi- almost the same for the two configurations at low
ciency of logistics operations for the last mile distribu- budget, the LMS configuration is at a disadvantage
tion. (iv) Having more budget than the sufficient level because of the following reason. In the LMS configu-
results in an opportunity cost. In other words, using ration, larger SAs are available closer to the PODs.
more budget than the sufficient level does not Since the handling cost is higher for the sites closers
improve the efficiency of operations, and therefore to PODs, the LMS configuration incurs more cost.
the additional budget (beyond the sufficient level) Therefore, as shown in Figure 4, for certain budget
may be used for some other activities, such as those in levels (e.g., when the budget level is between $32,734
the reconstruction phase. and $33,116 in Problem 1), the SML configuration is
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
806 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

Figure 6 Impact of Budget on Fixed Cost of Staging Areas

(a) (b)

(c)

feasible but the LMS configuration is infeasible. may also select some smaller SAs farther from the
Hence, at very low budget levels, there may be unsat- PODs. These two decisions have opposing impacts on
isfied demand in the LMS configuration but not in the the transportation cost. Hence, in certain situations,
SML configuration. Therefore, we can conclude that, the transportation cost may increase with an increase
in the event of a very low operational budget, the dis- in budget. The increase in transportation cost with an
aster response organizations should find smaller SAs increase in budget for the SML configuration at low
closer to the PODs in order to carry out the operations level of budget can be explained in a similar manner.
in a feasible manner. These results indicate that, in the optimal solution,
Figure 9 presents several interesting and (some- there is a strong interplay among the budgets allo-
what counter-intuitive) results. As discussed earlier, cated to different activities. Hence, the aid organiza-
as the budget increases, the items are stored closer to tions need to be prudent in choosing the
the PODs in order to increase the value function. configuration setting when either of the following
Hence, intuitively, the transportation cost should resources has limited availability: (i) potential SA
decrease with an increase in budget. However, as locations, (ii) inventory, (iii) trucks, or (iv) possible
shown in Figure 9, this is not always the case. For routes.
example, in the LMS configuration, at mid level of As an overall effect, Figures 4 and 5 show that the
budget, the transportation cost increases with an operational cost is sometimes higher in the LMS con-
increase in budget. This result can be explained as fol- figuration compared to that in the SML configuration
lows. As the budget increases, the aid organization (especially when the budget level is high and the
prefers to select more SAs closer to the PODs. Since impact of disaster is not very high). However, the
larger SAs are available closer to the PODs in this con- value function is always higher in the LMS configura-
figuration, the cost of opening and operating these tion compared to that in that in the SML configura-
SAs is high. Hence, in order to balance the total cost tion. This is because of the fact that, in the LMS
of opening and operating SAs, the aid organization configuration, it is possible to store more in the larger
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
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Figure 7 Impact of Budget on Handling Cost of Staging Areas

(a) (b)

(c)

SAs closer to the PODs. Therefore, from the perspec- consider following truck combinations to represent
tive of value function, it is beneficial to have larger different scenarios regarding the availability of the
SAs closer to the PODs (even when the budget is high number of trucks of each type: (12, 0, 0), (0, 12, 0), (3,
and the impact of disaster is not very high). However, 3, 6), (4, 4, 4), and (12, 12, 12). Here, (3, 3, 6) indicates
if the aid organization is concerned about the opera- that there are three trucks of Type 1, three trucks of
tional cost, it is sometimes beneficial to have larger Type 2, and six trucks of Type 3. Note that there are
SAs farther from the PODs at the high level of opera- same total number of trucks (i.e., 12) in each of the
tional budget. This benefit diminishes when the first four combinations. The last combination essen-
impact of disaster is high. Hence, for the high impact tially represents the unlimited number of trucks of
disasters, it is always beneficial to have larger SAs clo- each type.1 By having the combinations this way, we
ser to the PODs. On the other hand, it is sometimes are able to identify the best combination of trucks that
essential to have larger SAs farther from the PODs in is preferable for the logistic activity under a given dis-
order to carry out the operations in a feasible manner aster scenario.
(when the budget level is very low). In order to present our insights, we consider the last
Finally, we can conclude that the optimal budget al- combination (i.e., (12, 12, 12)) as the baseline case,
location should be determined by considering all the because it represents the unlimited truck case.We
different factors together, such as the configuration of thank an anonymous reviewer for suggesting this
SAs (SML, LMS, etc.), and the perceived humanitar- analysis. In Figure 10, we present the percentage
ian value. Hence, it is critical to find the right SAs in increase in operational cost (compared to that in the
the preparedness phase. baseline case) when the number of trucks of each type
is not unlimited. Here, we also attempt to analyze the
5.2. How Do the Types of Trucks Affect Cost? best combinations of trucks for different types of cri-
We may have all trucks of the same type (e.g., all sis. In this figure, the x-axis represents each problem
trucks of large size or all trucks of small size) or class, and, as discussed above, the y-axis represents
some mix of the different types of trucks. Hence, we the percentage increase in operational cost from the
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
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Figure 8 Impact of Budget on Fixed Cost of Trucks

(a) (b)

(c)

unlimited truck case. The absence of vertical bars selection of SAs (for brevity, we do not present the
indicates 0% (or almost 0%) increase in cost over the details of this result in the figure).
unlimited truck case. Hence, for those instances, the The results (and insights) presented above remain
solution is as good as that in the unlimited truck case. the same in the Unfulfilled Demand case men-
On the other hand, a large value indicates that the tioned in section 3 and discussed further in section 6.
solution deteriorates when the number of trucks
becomes limited. 6. Conclusions and Future Research
In the figure, different combinations for the number
of trucks of different types are represented as follows:
Directions
1 represents (12, 0, 0), 2 represents (0, 12, 0), and In this research, we present an integrated logistics
so on. model for humanitarian operations. The past studies
Interestingly, Figure 10 shows that none of the have emphasized that the humanitarian logistics
combinations has 0% increase in operational cost for problem needs to be solved differently than a tradi-
all the scenarios. However, the overall results sug- tional supply chain system. In this regard, by adding
gest that, in general, the results are better when more value on the humanitarian causes, our objective
there is a good mix of trucks of all types (i.e., combi- function helps in choosing staging areas that reduce
nations 3 and 4). Also, the figure shows that the the time to meet demand. Our innovative value func-
results are usually the worst for combination 1 tion and penalty costs help achieve this objective. In
where the number of large size trucks is high. our integrated model, we simultaneously determine
Hence, in spite of the economies of scale, it is not the location of staging areas, inventory assignment to
always beneficial to keep the high number of large staging areas, the number and sizes of trucks, and the
trucks. These results are consistent across different routing of trucks. These decisions were made in isola-
impacts of disasters (i.e., different problem classes). tion in the previous research. The results of the pro-
We also find that, for both SML and LMS configura- posed model provide valuable insights for the
tions, the truck combination does not impact the disaster management organizations who are responsi-
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
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Figure 9 Impact of Budget on Transportation Cost

(a) (b)

(c)

ble for the last mile distribution problem. First of all, resources are limited (which is usually the case). Fur-
our results show that having the value function in the ther, our results indicate that the disaster manage-
objective provides us the flexibility to select SAs ment organizations should allocate the budget in an
based on their closeness to the PODs rather than their optimal manner using the proposed methodology.
operational costs. This is very important in a disaster Having more budget than the optimal level results in
situation, because the demand needs to be satisfied in an opportunity cost. In other words, the optimal
a timely manner. assignment of budget may reduce the unnecessary
Our analysis would help emergency management allocation of money for a given humanitarian effort.
administrators in credibly establishing the minimum Next, we find that in the event of very low operational
budget required for carrying out the response opera- budget, the organizations must find smaller SAs clo-
tions. This is very useful, especially when the ser to the PODs in order to carry out the operations in

Figure 10 Sensitivity of Operational Cost to the Truck Combinations

(a) (b)
Manoj, Kumar, and Gupta: Integrated Logistics Model for Disaster
810 Production and Operations Management 25(5), pp. 791811, 2015 Production and Operations Management Society

a feasible manner. Further, from the perspective of Angelis, V. D., M. Mecoli, C. Nikoi, G. Storchi. 2007. Multiperiod
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