Analysis Of Humanitarian Logistics Operation Framework And Research Of Incentive Contract Model

Private enterprises, such as Wal-Mart and Home Depot, have implemented effective relief efforts in responding to Hurricane Katrina in2005. From the perspective of operation research, the factors of this success have been addressed as quick response, pre-position and logistic expertise. However, the waste made by FEMA for stockpiling food and ice in anticipation of a busy hurricane season in2006and several other cases indicate otherwise. In this paper, we introduce the private enterprise into a relief supply chain and propose an outsourcing framework to uncover the reason of Wal-Mart’s success and provide explanations to the counter-cases. Our study shows that the effective relief effort carried out by private enterprises in responding to Hurricane Katrina in2005attributes to the combination of proactive response method and logistic expertise. Our findings advocate adopting different strategies to deal with different types of relief supplies. Specifically, the proactive insourcing strategy is good enough for a relief supply chain involving only imperishable relief supplies. For perishable goods, the proactive outsourcing strategy can make a relief supply more efficient.The humanitarian logistics (HL) operated by relief organizations has been intensively explored, but the study on private enterprise participation in HL remains has been largely unexplored. Based on the analysis of the case of Hurricane Katrina, we find private enterprises capable to carry out a relief effort. Their logistics expertise, nation-wide distributor network, quick response, and high turnover rate make them able to improve the efficiency and effectiveness of a relief supply chain. But these years, fewer and fewer enterprises have taken disaster relief effort due to lack of motivation. Therefore, this research proposes an incentive contract for motivating private enterprises to utilize their logistical expertise for improving the performance of an HL operation. In particular, this study analyzes the theoretical model to examine the existing conditions and attributes of the incentive contract. A questionnaire survey is conducted to develop the deprivation cost function by measuring the degree of human suffering of relief beneficiaries. Finally, the presented numerical analysis combining the theorems of the model, results of the survey, and the data obtained from field research, rigorously proves the feasibility and effectiveness of the proposed incentive contract.