Socially Optimal Solutions in Freight and Disaster Response Logistics
Diana G. Ramirez-Rios, Ph.D.
Today’s society faces numerous challenges exacerbated by climate change, globalization, and socio-economic inequities, to name a few. These issues include heavy congestion, pollution, noise, and parking conflicts from the freight transportation perspective. In disaster logistics, the distribution of relief supplies encounters additional challenges because resources are mostly or entirely destroyed in the affected area after a disaster, and local relief supplies may not be available. In both scenarios, society is affected by the negative externalities of the movement of goods. Thus, logistical solutions must account for these negative impacts by aiming at the socially optimal.
This seminar focuses on the research developed in the disaster response logistics field, where the optimal minimizes the social costs of human suffering. This research considers the Facility Location problem, where disaster relief organizations aim for optimal points of distribution (PODs) to distribute the relief supplies to the people in need after a disaster occurs. Given a fixed distribution center where relief supplies are stored, the problem considers identifying the districts’ shapes and the location of the PODs inside the district, such that it minimizes the total social costs. The social costs consider the private or logistics costs (i.e., the fixed cost of setting the POD, the transportation, and inventory holding costs) and the externalities of the distribution in the form of deprivation costs. The deprivation cost is the cost experienced by the impacted individual for the time spent without the relief. The analytical and numerical results provide unique insights that can serve as guidelines for disaster responders at the planning stage to allocate resources better and alternative distribution strategies of relief in the affected regions.