Decision alternatives between expected cost minimization and worst case scenario in emergency supply – Second revision

Emergency supply chain management is often in the focal point of public scrutiny. Expected cost minimization may result in unacceptable high shortage for scenarios with small probabilities that is hardly tolerated by the public. To decrease the loss for the worst-case scenario, the min–max regret criterion could be applied for the pre-positioning decision. This alternative could get public support but results in high pre-positioning cost and large amount of unused resources since an unfavorable scenario with very low chance would dominate the solution. We suggest a compromising decision criterion and apply it for hurricane supply of commodities (like bottled water and canned food) in the Louisiana Gulf Coast. We coordinate the two stages, the preparedness and response decisions, in a large hierarchical emergency supply chain. The decision makers can utilize the major advantage of our parametric decision model providing a set of solution alternatives that dominate the decisions on different reliability levels.