A Policy for Managing Operational Assets to Minimize Deprivation Costs

Fard, Milad Keshvari; Eftekhar, Mahyar; Papier, Felix

doi:10.2139/ssrn.2893125

Cited by 4 publications

(2 citation statements)

References 19 publications

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“…Devalkar et al (2017) argues that when a proportion of donors only contribute after the delivery of results, the NPO can use an ex-post funding scheme to reduce the impact of budget uncertainty. Keshvari Fard et al (2019) show that under a higher budget uncertainty, the deprivation cost increases, while the fleet utilization rate decreases.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Each of these programs represents di↵erent impacts on the welfare of the beneficiaries, and investing one dollar of budget in some programs leads to a higher impact on the beneficiaries' welfare than the others (Keshvari Fard et al 2019). Given a limited budget, IHOs try to fulfill the missions with the highest impact on the welfare of the society.…”

Section: Introductionmentioning

confidence: 99%

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Budgeting in International Humanitarian Organizations

Fard

Ljubić

Papier

2022

M&SOM

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Problem definition: International humanitarian organizations (IHOs) prepare a detailed annual allocation plan for operations that are conducted in the countries they serve. The annual plan is strongly affected by the available financial budget. The budget of IHOs is derived from donations, which are typically limited, uncertain, and to a large extent earmarked for specific countries or programs. These factors, together with the specific utility function of IHOs, render budgeting for IHOs a challenging managerial problem. In this paper, we develop an approach to optimize budget allocation plans for each country of operations. Academic/practical relevance: The current research provides a better understanding of the budgeting problem in IHOs given the increasing interest of the operations management community for nonprofit operations. Methodology: We model the problem as a two-stage stochastic optimization model with a concave utility function and identify a number of analytical properties for the problem. We develop an efficient generalized Benders decomposition algorithm as well as a fast heuristic. Results: Using data from the International Committee of the Red Cross, our results indicate 21.3% improvement in the IHO’s utility by adopting stochastic programming instead of the expected value solution. Moreover, our solution approach is computationally more efficient than other approaches. Managerial implications: Our analysis highlights the importance of nonearmarked donations for the overall performance of IHOs. We also find that putting pressure on IHOs to fulfill the targeted missions (e.g., by donors or media) results in lower beneficiaries’ welfare. Moreover, the IHOs benefit from negative correlation among donations. Finally, our findings indicate that, if donors allow the IHO to allocate unused earmarked donations to other delegations, the performance of the IHO improves significantly.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Budgeting in International Humanitarian Organizations

Fard

Ljubić

Papier

2022

M&SOM

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Robust optimization of the insecticide-treated bed nets procurement and distribution planning under uncertainty for malaria prevention and control

et al. 2018

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Vector control, particularly distribution of insecticide-treated bed nets (ITNs), constitutes one of the major pathways to prevent and reduce malaria transmission. ITN distribution campaigns face several challenges, such as inadequate funding, budgetary constraints, hard-to-reach areas, limited transportation, and market and price volatility. While long-term agreements and proper planning can effectively overcome such challenges, those options may not be available for all humanitarian organizations and governments. To gain a better understanding of such tradeoffs we develop a robust optimization model that minimize ITN distribution costs while taking into consideration protection against financial, market and logistical uncertainties. The simultaneous account of such uncertainties is rarely seen on the humanitarian supply chain design literature. The proposed robust model explores data-driven adaptive uncertainty sets that capture the dependence structure among procurement and distribution costs, leading to plausible uncertain scenarios. In addition, we develop a hierarchical optimization approach to ease the burden of setting a specific robustness level for each constraint, when uncertainties are related to the independent terms. We study a United Nations Children's Fund (UNICEF) ITN distribution campaign in Ivory Coast, observing that (1) total costs increase with campaign robustness, as expected, and (2) campaign robustness comprises of improved supply chain flexibility, which might minimize efforts if it becomes necessary to adjust procurement and transportation plans when uncertainty arises. In addition, assessing robust solutions through Monte Carlo simulations against several realizations of uncertain parameter values indicates that, as desired, robust plan feasibility increases with the specified level of conservatism.

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The Facts on the Ground: Evaluating Humanitarian Fleet Management Policies Using Simulation

Ryzhov

Eftekhar

2018

SSRN Journal

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A Policy for Managing Operational Assets to Minimize Deprivation Costs

Cited by 4 publications

References 19 publications

Budgeting in International Humanitarian Organizations

Budgeting in International Humanitarian Organizations

Robust optimization of the insecticide-treated bed nets procurement and distribution planning under uncertainty for malaria prevention and control

The Facts on the Ground: Evaluating Humanitarian Fleet Management Policies Using Simulation

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