Inventory management policies in humanitarian aid operations

This project has been selected for consideration for a fully-funded Vice-Chancellor’s PhD Scholarship at Nottingham Trent University. Fifteen PhD projects will be funded across the University through the Vice-Chancellor’s PhD Scholarship Scheme for entry in 2015/16. Full details of the projects and the competition are available at

http://www.ntu.ac.uk/research/graduate_school/studentships/index.html


Humanitarian aid can be defined as actions implemented to save lives, mitigate suffering, and maintain and protect human dignity during and after emergencies. Humanitarian relief organizations are involved in both disaster relief and development programs. Inventory can be an effective mechanism for improving response and capacity to both program related efforts and disaster relief. Managing logistics holds an important role in humanitarian action to get the necessary resources and supplies to the right place quickly (Overstreet et al., 2011). A delay in humanitarian supply chains could literally mean the difference between life and death for those most severely impacted by the disaster. For that reason, managing inventory is of critical concern to humanitarian organisations. However, how to manage inventory in these situations is largely unknown.
Humanitarians can learn a lot from logistics operations in a commercial environment (Van Wassenhove, 2006). In commercial business environments, inventory management has been proven to be able to increase customer service level by managing demand uncertainty and lowering the total logistics costs. These findings are confirmed in a large number of inventory management papers in the commercial area (cf. Williams and Tokar, 2008).
In humanitarian aid research inventory management is a relatively new topic with many relevant areas uncovered, particularly when it comes to connecting inventory policies to the traits of humanitarian operations (de Leeuw et al., 2012). Some examples of inventory management research in humanitarian aid are Beamon and Kotleba (2006), who develop a stochastic inventory control model that determines optimal order quantities and reorder points for a long-term emergency relief response. McCoy and Brandeau (2011) developed an inventory model for the supply from a central stockpile to refugee camp or relief operation by considering partition a given budget between stockpiling and shipping cost and quantities of items shipped from stockpile to the relief operation over time. However, academic literature has failed to provide an in-depth treatment on inventory management.

In the proposed research project we aim to investigate the effect on inventory management policies of a number of typical characteristics in humanitarian supply chains, including:
* Dual demand sinks
In business the same product may be demanded by several customer classes that may differ in demand rates or backorder costs (de Vericourt et al., 2001). When demand occurs, depending on the customer’s class, it may be satisfied from stock (when available) or it may be back-ordered to be satisfied later. In the same vein, shortage costs in disasters aid may be higher than continuous aid since emergencies requires fast response and high flexibility. This impacts inventory management policies
* Item shelf life
Many inventory relief items, such as food and medicine have expiry dates that have to be acknowledged (Whybark, 2007). Although the issue of limited product shelf life is not new to managing supply chains in business (Nahmias, 1982) it is new to humanitarian supply chains (Saputra et al. 2015) and depends on ao. the frequency of disaster occurrence.
*Transport mode choice
IFRC (2010) has opted to use both airfreight and sea freight for responding to disasters in order to reduce shipping costs while reacting in an appropriate manner to disasters. There is a long history of literature on minimising total logistics costs in transport systems (Baumol & Vinod, 1970), but in humanitarian supply chains this issue has not been given considerable research attention.

In the proposed project we aim to develop simulation models to investigate the effect of the

1. Map the business process of inventory management of humanitarian aid, both for disasters and continuous aid.
2. Review on inventory management in humanitarian aid operations and comparison with Inventory Management in commercial environments.
3. Develop an integrated inventory management (simulation) model taking and algorithms in humanitarian aid operations, taking account of relevant characteristics.
4. Test the integrated inventory management model in a humanitarian organisation

This project will be supervised by Prof. Sander de Leeuw who has long-standing experience with managing supply chains for disasters given his research work with a.o. Medicins Sans Frontieres, UNHCR, Oxfam, Unicef and World Vision. Dr. Ehsan Sabet, an expert in inventory modelling, is also involved in supervision. The supervisors are particularly seeking a candidate with an interest in solving quantitative supply chain problems using simulation.