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A Multitiered Supply Chain Network Equilibrium Model for Disaster Relief with Capacitated Freight Service Provision

In: Dynamics of Disasters

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  • Anna Nagurney

    (University of Massachusetts)

Abstract

In this paper, a multitiered supply chain network equilibrium model is constructed, consisting of multiple humanitarian organizations, who seek to purchase services from multiple competing freight (logistic) service providers, for transportation of disaster relief supplies to multiple points of demand for distribution to victims. The freight service providers are faced with capacities associated with the volume of shipments that they can transport. We capture the behavior of the humanitarian organizations who individually minimize the total cost associated with payments for the freight transportation and their transaction costs. We also identify the profit-maximizing behavior of the freight service providers. The governing supply chain network equilibrium conditions are formulated as a variational inequality problem and conditions for existence given. We propose an algorithm for the computation of the equilibrium disaster relief item flows and Lagrange multipliers associated with the freight capacity constraints and provide conditions for convergence. The algorithm is then applied to several numerical examples comprising a case study focusing on an international healthcare crisis. In the case study, we explore the impacts of the addition of a freight service provider as well as that of a humanitarian organization on the profits of freight service providers and on the costs incurred by the humanitarian organizations. The theoretical and numerical results in this paper advance game theory frameworks for humanitarian operations and disaster relief, an area in which there is only a limited literature.

Suggested Citation

  • Anna Nagurney, 2018. "A Multitiered Supply Chain Network Equilibrium Model for Disaster Relief with Capacitated Freight Service Provision," Springer Optimization and Its Applications, in: Ilias S. Kotsireas & Anna Nagurney & Panos M. Pardalos (ed.), Dynamics of Disasters, pages 85-108, Springer.
    • Handle: RePEc:spr:spochp:978-3-319-97442-2_5
    DOI: 10.1007/978-3-319-97442-2_5
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    Cited by:

    1. Nagurney, Anna & Salarpour, Mojtaba & Daniele, Patrizia, 2019. "An integrated financial and logistical game theory model for humanitarian organizations with purchasing costs, multiple freight service providers, and budget, capacity, and demand constraints," International Journal of Production Economics, Elsevier, vol. 212(C), pages 212-226.
    2. Anna Nagurney & Pritha Dutta, 2019. "Supply chain network competition among blood service organizations: a Generalized Nash Equilibrium framework," Annals of Operations Research, Springer, vol. 275(2), pages 551-586, April.
    3. Anna Nagurney & Mojtaba Salarpour & June Dong & Ladimer S. Nagurney, 2020. "A Stochastic Disaster Relief Game Theory Network Model," SN Operations Research Forum, Springer, vol. 1(2), pages 1-33, June.
    4. Gossler, Timo & Wakolbinger, Tina & Nagurney, Anna & Daniele, Patrizia, 2019. "How to increase the impact of disaster relief: A study of transportation rates, framework agreements and product distribution," European Journal of Operational Research, Elsevier, vol. 274(1), pages 126-141.
    5. Hamdouch, Younes & Ghoudi, Kilani, 2020. "A Supply Chain Equilibrium Model with General Price-Dependent Demand," Operations Research Perspectives, Elsevier, vol. 7(C).
    6. Nagurney, Anna & Besik, Deniz & Li, Dong, 2019. "Strict quotas or tariffs? Implications for product quality and consumer welfare in differentiated product supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 136-161.

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