View in EDS

An insurance risk management framework for disaster relief and supply chain disruption inventory planning.

Saved in:
Bibliographic Details
Title: An insurance risk management framework for disaster relief and supply chain disruption inventory planning.
Authors: Lodree Jr, E. J.1 elodree@aubum.edu, Taskin, S.1
Source: Journal of the Operational Research Society. May2008, Vol. 59 Issue 5, p674-684. 11p. 2 Charts, 2 Graphs.
Subjects: Government agencies, Nonprofit organizations, Associations, institutions, etc., In-house services (Business), Industrial sociology, Organizational structure, Supply-side economics, Economic equilibrium, Energy demand management
Abstract: Government agencies, not-for-profit organizations, and private corporations often assume leading roles in the delivery of supplies, equipment, and manpower to support initial response operations after a disaster strikes. These organizations are faced with challenging logistics decisions to ensure that the right supplies (including equipment and personnel) are in the right places, at the right times, and in the right quantities. Such logistics planning decisions are further complicated by the uncertainties associated with predicting whether or not a potential threat will materialize into an emergency situation. This paper introduces newsvendor variants that account for demand uncertainty as well as the uncertainty surrounding the occurrence of an extreme event. The optimal inventory level is determined and compared to the classic newsvendor solution and the difference is interpreted as the insurance premium associated with proactive disaster-relief planning. The insurance policy framework represents a practical approach for decision makers to quantify the risks and benefits associated with stocking decisions related to preparing for disaster relief efforts or supply chain disruptions. [ABSTRACT FROM AUTHOR]
Copyright of Journal of the Operational Research Society is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
Description
Abstract:Government agencies, not-for-profit organizations, and private corporations often assume leading roles in the delivery of supplies, equipment, and manpower to support initial response operations after a disaster strikes. These organizations are faced with challenging logistics decisions to ensure that the right supplies (including equipment and personnel) are in the right places, at the right times, and in the right quantities. Such logistics planning decisions are further complicated by the uncertainties associated with predicting whether or not a potential threat will materialize into an emergency situation. This paper introduces newsvendor variants that account for demand uncertainty as well as the uncertainty surrounding the occurrence of an extreme event. The optimal inventory level is determined and compared to the classic newsvendor solution and the difference is interpreted as the insurance premium associated with proactive disaster-relief planning. The insurance policy framework represents a practical approach for decision makers to quantify the risks and benefits associated with stocking decisions related to preparing for disaster relief efforts or supply chain disruptions. [ABSTRACT FROM AUTHOR]
ISSN:01605682
DOI:10.1057/palgrave.jors.2602377