Abstract
We present a collaborative prepositioning strategy to strengthen the disaster preparedness of the Caribbean countries, which are frequently hit by hurricanes. Since different subsets of countries are affected in each hurricane season, significant risk pooling benefits can be achieved through horizontal collaboration, which involves joint ownership of prepositioned stocks. We worked with the intergovernmental Caribbean Disaster and Emergency Management Agency to design a collaborative prepositioning network in order to improve regional response capacity. We propose a novel insurance-based method to allocate the costs incurred to establish and operate the proposed collaborative prepositioning network among the partner countries. We present a stochastic programming model, which determines the locations and amounts of relief supplies to store, as well as the investment to be made by each country such that their premium is related to the cost associated with the expected value and the standard deviation of their demand. We develop a realistic data set for the network by processing real-world data. We conduct extensive numerical analyses and present insights that support practical implementation. We show that a significant reduction in total inventory can be achieved by applying collaborative prepositioning as opposed to a decentralized policy. Our results also demonstrate that reducing the replenishment lead time during the hurricane season and improving sea connectivity are essential to increasing the benefits resulting from the network.
Original language | English |
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Pages (from-to) | 2431-2455 |
Number of pages | 25 |
Journal | Production and Operations Management |
Volume | 28 |
Issue number | 10 |
Early online date | 23 May 2019 |
DOIs | |
Publication status | Published - 1 Oct 2019 |
Funding
The authors thank the editors and the review team for their valuable suggestions. They are also grateful to Ronald Jackson from CDEMA, Stephany Murillo and Mike Janssens from the IFRC, and Mark Kirton from the University of the West Indies for their significant support to this project. Thanks are also due to Jessica Rodr?guez-Pereira for her help with data processing and programming. Burcu Balcik was supported by a grant from the Scientific and Technological Research Council of Turkey (TUBITAK) 2219 program. Selene Silvestri received a postdoctoral fellowship from the Institute for Data Valorisation (IVADO). Marie-?ve Rancourt and Gilbert Laporte were funded by the Canadian Natural Sciences and Engineering Research Council under grants 2014-03945 and 2015-06189. This support is gratefully acknowledged.
Keywords
- horizontal collaboration
- hurricane preparedness
- insurance
- prepositioning
- risk pooling
ASJC Scopus subject areas
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Management of Technology and Innovation
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Gilbert Laporte
- Management - Professor
- Information, Decisions & Operations
- Smart Warehousing and Logistics Systems - Professor
Person: Research & Teaching