Pre-positioning inventory and service outsourcing of relief material supply chain

Yao, Xin; Huang, Ruting; Song, Malin; Mishra, Nishikant

Abstract

Service outsourcing is very common in a commercial supply chain, and in humanitarian relief area the transportation service is usually outsourced. To practice relief supply more effectively, it seems essential to enlarge outsourcing from shipping to more areas, and private enterprises could play a vital role. This paper examines the optimal pre-disaster order quantity of a certain relief commodity, based on a two-stage coordinated approach. Our findings show that the delay cost, shortage penalty cost, risk of supply shortage, salvage value, expected perishable rate, unit inventory cost and reactive price have significant impacts on the optimal amount of propositioned inventory. Moreover, the outsourcing strategies differ by types of relief commodities. For perishable supplies, proactive or reactive outsourcing would improve the benefits of buyer and supplier simultaneously. As for imperishable supplies, it is better to combine proactive insourcing approach and reactive outsourcing strategy. In view of some supplies whose monitoring cost is high, the insourcing approach is much better than outsourcing approach.

Citation

Yao, X., Huang, R., Song, M., & Mishra, N. (2018). Pre-positioning inventory and service outsourcing of relief material supply chain. International Journal of Production Research, 56(21), 6859-6871. https://doi.org/10.1080/00207543.2018.1495853

• Journal Article Type: Article
• Acceptance Date: Jun 26, 2018
• Online Publication Date: Jul 19, 2018
• Publication Date: Jul 19, 2018
• Deposit Date: Aug 8, 2018
• Publicly Available Date: Jul 20, 2019
• Journal: International Journal of Production Research
• Print ISSN: 0020-7543
• Publisher: Taylor and Francis
• Peer Reviewed: Peer Reviewed
• Volume: 56
• Issue: 21
• Pages: 6859-6871
• DOI: https://doi.org/10.1080/00207543.2018.1495853
• Keywords: Management Science and Operations Research; Strategy and Management; Industrial and Manufacturing Engineering
• Public URL: https://hull-repository.worktribe.com/output/972881
• Publisher URL: https://www.tandfonline.com/doi/full/10.1080/00207543.2018.1495853
• Additional Information: Peer Review Statement: The publishing and review policy for this title is described in its Aims & Scope.; Aim & Scope: http://www.tandfonline.com/action/journalInformation?show=aimsScope&journalCode=tprs20
• Contract Date: Aug 8, 2018