Abstract
Due to difficulties in accurately predicting the emergency timing and the magnitude of a disaster, operations for perishable emergency inventory planning often encounter expiration and shortage problems. In order to ease the expiration problem in emergency medicine preparation inventories, this paper investigates an emergency medicine closed-loop supply chain for returning unused items from an ERC (Emergency Reserve Center) to a hospital. To assure that the return strategy is meaningful, we propose a critical parameter that we term the latest return time, after which the remaining emergency medicine in the ERC cannot be returned to the hospital. In addition, the short lifetime of emergency products and uncertainty about demand time and demand quantity are also considered in this emergency inventory planning system. In analyzing the optimal ordering policies, we find that the two threshold values for the predefined return time, which affect the total costs, are not monotonous; rather, the direction of their effect is first down, then up, and then down again, which means that a better predefined value of the latest return time can be determined by minimizing total costs. By studying and comparing decentralized and centralized decisions, we find that the centralized decision system works better to control expiration and costs. Therefore, we design a coordination mechanism for the cooperation between the ERC and the hospital. Our analysis shows that we should not ignore the emergency uncertainty and perishability of emergency items.
Highlights
To prepare for man-made or natural disasters, many cities maintain an emergency reserve center to store key emergency items, like food, water, and medicine
Given our efforts to reduce the expiration problem for short lifetime emergency supplies with uncertainties about occurrence time and the closed-loop emergency supply chain, we develop quantitative models to answer the following research questions: 1. What are the effects of introducing a closed-loop strategy for the emergency inventory planning system? does the closed-loop strategy reduce both the expiration losses and the shortage losses experienced by a particular emergency inventory system during a disaster?
When the predefined return time is later than the threshold value, which means that the probability that return activities will happen is low, the hospital will need to store at least as much emergency medicine as it would in a decentralized setting
Summary
To prepare for man-made or natural disasters, many cities maintain an emergency reserve center (referred to hereafter as ERC) to store key emergency items, like food, water, and medicine. Referring to the achievement of Zhou and Olsen (2017) [3], and observing hospitals’ regular demand, we propose a closed-loop supply chain that includes the ERC, the hospital and the supplier. Given our efforts to reduce the expiration problem for short lifetime emergency supplies with uncertainties about occurrence time and the closed-loop emergency supply chain, we develop quantitative models to answer the following research questions: 1. To answer these research questions, we develop models under newsboy settings using a closed-loop supply chain for a hospital, an ERC and a supplier for perishable emergency supplies. This article offers a closed-loop perishable emergency supply chain strategy derived from the uncertainties about occurrence time and severity of damage.
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