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Quantitative Decision Models for Humanitarian Logistics by Mauro Quantitative Decision Models for Humanitarian Logistics by Mauro Falasca Dissertation submitted to the faculty of the Virginia Polytechnic Institute and State University in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business, Management Science Dr. Christopher W. Zobel, Chairman Dr. Deborah F. Cook Dr. Cliff T. Ragsdale Dr. Loren Paul Rees Dr. Roberta S. Russell August 20, 2009 Blacksburg, Virginia Key words: Humanitarian Logistics, Fuzzy Logic, Optimization, Procurement, Scheduling, Spreadsheet Modeling, Stochastic Programming, Volunteer Labor Copyright 2009, Mauro Falasca Quantitative Decision Models for Humanitarian Logistics Mauro Falasca Abstract Humanitarian relief and aid organizations all over the world implement efforts aimed at recovering from disasters, reducing poverty and promoting human rights. The purpose of this dissertation is to develop a series of quantitative decision models to help address some of the challenges faced by humanitarian logistics. The first study discusses the development of a spreadsheet-based multicriteria scheduling model for a small development aid organization in a South American developing country. Development aid organizations plan and execute efforts that are primarily directed towards promoting human welfare. Because these organizations rely heavily on the use of volunteers to carry out their social mission, it is important that they manage their volunteer workforce efficiently. In this study, we demonstrate not only how the proposed model helps to reduce the number of unfilled shifts and to decrease total scheduling costs, but also how it helps to better satisfy the volunteers’ scheduling preferences, thus supporting long-term retention and effectiveness of the workforce. The purpose of the second study is to develop a decision model to assist in the management of humanitarian relief volunteers. One of the challenges faced by humanitarian organizations is that there exist limited decision technologies that fit their needs while it has also been pointed out that those organizations experience coordination difficulties with volunteers willing to help. Even though employee workforce management models have been the topic of extensive research over the past decades, no work has focused on the problem of managing humanitarian relief volunteers. In this study, we discuss a series of principles from the field of volunteer management and develop a multicriteria optimization model to assist in the assignment of both individual volunteers and volunteer groups to tasks. We present illustrative examples and analyze two complementary solution methodologies that incorporate the decision maker’s preferences and knowledge and allow him/her to trade-off conflicting objectives. The third study discusses the development of a decision model for the procurement of goods in humanitarian efforts. Despite the prevalence of procurement expenditures in humanitarian efforts, procurement in humanitarian contexts is a topic that has only been discussed in a qualitative manner in the literature. In our paper, we introduce a two stage decision model with recourse to improve the procurement of goods in humanitarian relief supply chains and present an illustrative example. Conclusions, limitations, and directions for future research are also discussed. Keywords: Development Aid, Humanitarian Logistics, Fuzzy Logic, Multicriteria Decision Making, Optimization, Procurement, Scheduling, Spreadsheet Modeling, Stochastic Programming, Volunteer Labor iii ACKNOWLEDGEMENTS First, I would like to thank my chairman and advisor, Dr. Christopher W. Zobel, for all his patience, guidance and support throughout this journey. I would also like to thank my dissertation committee members: Dr. Deborah F. Cook, Dr. Cliff T. Ragsdale, Dr. Loren Paul Rees and Dr. Roberta S. Russell. Thank you for your time, advice, and friendship. I would like to express my gratitude to my family and friends for their support during this process. In particular, I would like to thank my wife, Laura for her constant encouragement, help and support during my graduate studies. iv Table of Contents Page List of Figures ………………………………………………………………………………… vii List of Tables …………………………………………………………………………………. viii Chapter 1 – Introduction…………………………………………………………………….. 1 Introduction ……………………………………………………………………………………. 2 Challenges of Humanitarian Supply Chain Management ……………………………………... 4 Research Objectives …………………………………………………………………………… 5 Contributions ………………………………………………………………………………….. 6 Structure of the Dissertation …………………………………………………………………... 7 References .…………………………………………………………………………………….. 9 Chapter 2 – Literature Review ……………………………………………………………… 11 Humanitarian Logistics ………………………………………………………………………... 12 Humanitarian Volunteer Labor ………………………………………………………………... 17 Humanitarian Resource procurement …………………………………………………………. 21 OR/MS Modeling for Humanitarian Logistics ………………………………………………... 24 References .…………………………………………………………………………………….. 32 Chapter 3 – Helping a Small Development Aid Organization Manage Volunteers More Efficiently ……………………………………………………………………………………... 39 Abstract .……………………………………………………………………………………….. 40 Introduction .…………………………………………………………………………………… 41 Description of the Problem .…………………………………………………………………… 44 Proposed Solution .…………………………………………………………………………….. 45 Results .………………………………………………………………………………………… 52 Conclusions and Lessons Learned .……………………………………………………………. 55 Appendix .……………………………………………………………………………………… 57 References .…………………………………………………………………………………….. 60 Chapter 4 – An optimization model for humanitarian relief volunteer management …... 62 Abstract .……………………………………………………………………………………….. 63 Introduction .…………………………………………………………………………………… 64 Literature Review .……………………………………………………………………………... 65 Characterization of a Humanitarian Volunteer Management Model .…………………………. 68 Proposed Model .………………………………………………………………………………. 72 Solution Methodology I: Efficient Frontier Approach .……………………………………….. 77 Solution Methodology II: Fuzzy Logic Approach .……………………………………………. 80 Conclusions and Future Research .…………………………………………………………….. 87 References .…………………………………………………………………………………….. 92 v Chapter 5 – A Two-Stage Decision Model for Procurement in Humanitarian Relief Supply Chains ………………………………………………………………………………... 95 Abstract .……………………………………………………………………………………….. 96 Introduction .…………………………………………………………………………………… 97 Literature Review .……………………………………………………………………………... 99 Procurement in Humanitarian Supply Chains .…………………………………………………104 Model .…………………………………………………………………………………………. 109 Application Example .…………………………………………………………………………. 113 Results .…………………………………………………………………………………………117 Conclusions .……………………………………………………………………………………119 Limitations and Directions for Future Research .………………………………………………120 References .……………………………………………………………………………………..124 Chapter 6 – Summary and Conclusions…………………………………………………….. 128 Summary .……………………………………………………………………………………… 129 Conclusions .…………………………………………………………………………………… 129 Future Research .………………………………………………………………………………. 131 Bibliography ………………………………………………………………………………….. 136 vi List of Figures Figure Page 2.1 – A typical humanitarian supply chain ……………...…………………………………….. 14 2.2 – “Generous Donation” membership function ………………...…………………………... 30 3.1 – Graphical display of the organization’s shift structure ………………...………………... 44 3.2 – Screenshot of the main menu ………………...………………………………………….. 50 3.3 – The system provides the user with what-if functionality ………………...……………… 51 3.4 – Mean results obtained with the two solution methods for the Fairness objective ………. 53 3.5 – Mean results obtained with the two solution methods for the Labor Shortages objective 54 3.6 – Mean results obtained with the two solution methods for the Cost objective …………... 55 4.1 – Efficient frontier results ………………...……………………………………………….. 79 4.2 – “Acceptable Shortage Costs” membership function ………………...…………………... 81 4.3 – “Number of Undesired Assignments” membership function ………………...…………. 83 4.4 – Plot of fuzzy model results vs. efficient frontier results ………………………………… 86 4.5 – A fuzzy three-objective model ………………...………………………………………… 89 5.1 – Expenditures in humanitarian relief logistics …………………………………………… 98 5.2 – Representation of the two-stage procurement process in humanitarian relief …………...108 5.3 – Representation of possible scenarios for the two-stage humanitarian relief procurement model ………………...…………………………………………………………………………114 5.4 – Representation of a three-stage model for gradual onset disasters ………………...…….122 vii List of Tables Table Page 4.1 – Comparison of paid labor and humanitarian volunteer labor scheduling models ………. 70 4.2 – Two sample schedules ………………...………………………………………………… 84 4.3 – Membership functions related to three alternative relief scenarios ………………...…… 85 4.4 – Plot of fuzzy model results vs. efficient frontier results ………………...………………. 86 5.1 – Parameter values used in the test case ………………...………………………………… 115 5.2 – Stochastic model results ……………...…………………………………………………..117 5.3 – Summary of results ……………...………………………………………………………. 118 viii CHAPTER 1 INTRODUCTION 1 Chapter 1 Introduction Introduction Humanity’s top 10 problems over the next 50 years include poverty, disease, education, and population (Smalley 2003). In addition, the impact of natural and man-made disasters cannot be underestimated. Annually, 500 disasters affect some 200 million people and take the lives of around 75 000 people (van Wassenhove 2006). Unfortunately, disasters will continue to cause significant human life and economic
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