Supply Location and Transportation Planning for Hurricanes:A Two-Stage Stochastic Programming Framework Jomon A. Paul andMinjiao Zhang
European Journal of Operational Research Vol. 274, Issue 1 (April) 2019, pp. 108-125
Overview We develop a two-stage stochastic programming model with recourse actions for hurricane preparedness. In the first stage, it works to optimize the locations of Points of Distribution (PODs), medical supply levels, and transportation capacity; in the second, transportation decisions and flow. Our model minimizes the total social cost, comprised of deprivation and commercial logistics costs, and facilitates determination of the optimal deployment time. We demonstrate the benefits of our approach in a case study. As risk attitude goes from optimistic to pessimistic, the optimal number of PODs increases exponentially to distribute the risk. A similar trend holds for total costs as a function of hurricane category and its interplay with risk: for weaker hurricanes, regardless of risk attitude, the optimal decision is to deploy closer to landfall at 12 hours; for stronger, resources are best deployed earlier, at 36 hours. Since deployment cost also increases exponentially as landfall approaches, when budget is limited, risk attitude influences deployment decisions and a preference for lower severity-level supplies. Our model addresses hurricanes but can be adapted to other disasters with forewarnings, such as winter storms, floods, or disease outbreaks.
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