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Designing a resilient supply chain: An approach to reduce drug shortages in epidemic outbreaks


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INTRODUCTION: Supply network design is a long-studied topic that has evolved to address disruptive situations. The risk of supply chain disruption leads to the development of resilient supply chains that are capable of reacting effectively. OBJECTIVES: In the context of public health, drug supply networks face shortage challenges in many situations, such as current epidemic outbreaks such as COVID-19. Drug shortages can occur due to manufacturing problems, lack of infrastructure, and immediate reaction mechanisms. METHODS: The case study is solved with anyLogistix optimization and simulation software. RESULTS: We present the results of a hypothetical study on the impact of COVID-19 on a regional supply network. The results of this research are intended to be the basis for the design of resilient supply chains in epidemic outbreaks. CONCLUSION: Drug providers should consider strategies to prevent or reduce the impact of shortages as well as disruption spreads. Keywords Supply chain design, resilient supply chain, epidemic outbreaks, COVID-19, drug shortages, Dynamic Simulation
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Designing a resilient supply chain: An approach to
reduce drug shortages in epidemic outbreaks
Jose Antonio Lozano-Diez1, Jose Antonio Marmolejo-Saucedo2,and Roman Rodriguez-Aguilar3
1Universidad Panamericana. Augusto Rodin 498, Ciudad de México, 03920, México.
2Universidad Panamericana. Facultad de Ingenieria. Augusto Rodin 498, Ciudad de Mexico, 03920, Mexico.
3Universidad Panamericana. Escuela de Ciencias Económicas y Empresariales. Augusto Rodin 498, Ciudad de
México, 03920, México.
INTRODUCTION: Supply network design is a long-studied topic that has evolved to address disruptive
situations. The risk of supply chain disruption leads to the development of resilient supply chains that are
capable of reacting eectively.
OBJECTIVES: In the context of public health, drug supply networks face shortage challenges in many
situations, such as current epidemic outbreaks such as COVID-19. Drug shortages can occur due to
manufacturing problems, lack of infrastructure, and immediate reaction mechanisms.
METHODS: The case study is solved with anyLogistix optimization and simulation software.
RESULTS: We present the results of a hypothetical study on the impact of COVID-19 on a regional supply
network. The results of this research are intended to be the basis for the design of resilient supply chains in
epidemic outbreaks.
CONCLUSION: Drug providers should consider strategies to prevent or reduce the impact of shortages as well
as disruption spreads.
Received on 18 April 2020; accepted on 05 May 2020; published on 07 May 2020
Keywords: Supply chain design, resilient supply chain, epidemic outbreaks, COVID-19, drug shortages, Dynamic
Copyright © 2020 Jose Antonio Lozano-Diez et al., licensed to EAI. This is an open access article distributed under the
terms of the Creative Commons Attribution license (, which permits
unlimited use, distribution and reproduction in any medium so long as the original work is properly cited.
1. Introduction
The Mexican health system has gone through several
reforms, one of the most important being the reform
of the General Health Law of 2003 that gave rise to
the Social Protection System in Health, which would
operate through the Popular Insurance as a public
insurer ocially starting operations in 2004.
The configuration of the public health system in
Mexico was integrated by three large institutions, the
ISSSTE that provides social security to state workers,
the IMSS that provides coverage to workers in the
private sector, and the Popular Insurance that integrates
the open population without import your work or social
Corresponding author.Email:
In addition to these reforms, the demographic and
epidemiological profile of the Mexican population has
changed. The epidemiological transition that Mexico
is going through and the aging of its population
are determining factors in the demand for specific
health services, as well as the requirement for specific
medications to care for the population [1]. There are
additional risk factors such as for overweight and
obesity, as well as an increase in the prevalence of
chronic diseases. In 2018, it was recorded that 75.2%
of the adult population (20 years and over) had
problems with overweight or obesity. Further 10.3%
of the population had diabetes and 18.4% suer from
hypertension [2]. This implies an increase in overweight
and obese people, and people with chronic diseases,
aecting the mortality of the Mexican population and
generating significant pressures on the Health System.
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Concerning demographic transition in 2020, the
average age of the Mexican population was 29.2 years
in contrast to the year 2000 where the average age
of Mexicans was 22.9 years. According to data from
the Economic Commission for Latin America and the
Caribbean (ECLAC), the population aged 65 and over in
Mexico increased from 6.1% in 2010 to 7.6% in 2020 [3].
The increase in the adult population likewise generates
greater pressure. to the health system, in addition to
inverting the population pyramid. Fig. 1shows the
population pyramid of Mexico in 2012 and the data
projected to 2030 by the National Population Council
Figure 1. Mexico population pyramid, 2012-2030.
In a framework of limited resources, it generates
significant pressures on the financing of the system.
In 2017, health spending as a percentage of GDP
represented 5.5%, of which 52% corresponds to public
spending, 43% to pocket spending, and 5% to private
prepaid [4].
1.1. Analysis of drugs supply in the public sector
As part of the new configuration of the health system
in Mexico, the goal was to achieve universal coverage
through eective access to health services. Addressing
priority problems in the health sector, such as the
supply and complete supply of medicines in public
health services. The quality care process is completed
at the moment the patient receives the prescription
medications that will allow them to recover their state
of health.
The issue of drug supply and supply in Mexico is a
topic that has been worked on for many years, through
the implementation of various strategies that allow the
supply and supply of 100% of the drugs prescribed to
patients. In 2012, the percentage of full prescriptions
filled in the public sector was 65.2%, which implied
that 34.8% of the prescriptions were not filled. For
2018, this indicator was 69.9%, with 30.1% of recipes
not filled. The percentage of complete prescriptions
filled has improved in the last 6 years, however, the
established goal of 90% has not been reached (Fig. 2).
Various strategies have been implemented to improve
the medicine supply chain and to guarantee the supply
Figure 2. Percentage of a complete supply of drugs, 2012-2018.
and complete supply of prescriptions.As we can see
in Table 1, this table summarizes the main among
some strategies implemented to improve the supply and
supply of medicines in the public sector in Mexico [5].
Table 1. Policies implemented at the federal leve
Policies Description
Coordinating Commission for the Negotiation of
Medicine Prices and other Health Supplies
Intersectoral commission for the negotiation of
medicines and other single-source supplies.
Negotiations take place annually.
Consolidated purchase of medicines
Consolidated purchase of medicines integrating
the requirements of the main public health
institutions, as well as entities from the federal
and state levels.
Reference prices
Reference list for the purchase of medicines
financed with resources from the Social Health
Protection System, the objective is to reduce
the variance in the public purchase prices acquired
by the federal entities.
Generic release policy
Prioritization of the issuance of health records
for high-priority generic products. This will allow
there to be more competitors in the shorter term in
the market and will generate a decrease in the prices
of medicines whose patent has expired.
These policies have generated positive results in
the medicine supply chain in the health sector, but
according to the indicators, there are still important
gaps to be resolved. An example of this is household
out-of-pocket spending on medicines, since failing to
supply the public sector in the best of cases patients
must go to the private market to purchase their
medicines. According to data from the National Survey
of Household Income and Expenditure (ENIGH for
its acronym in Spanish) in 2018, Mexican households
spent around MXN$34,332 million on medicines. This
represents 31.3% of out-of-pocket spending on health of
Mexican households, which represented MXN 109,700
million in the same year, followed by spending on
outpatient care (28.0%) and hospital care (21.1%), fig.
The medicine supply chain is a complex process and
with a very particular operation unlike the supply chain
of other products. Both supply and demand interact
with various agents, who participate in the supply
process and those who participate in the patient care
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Figure 3. Out-of-pocket expenditure on household health in
Mexico, 20016-2018.
process (Fig. 4). In the case of the public sector, the
federation only controls part of the supply chain, so
there are inherent risks and the probability of failure
at each link in the supply chain. Furthermore, the
participation of the pharmaceutical industry is highly
relevant because it participates in the entire process
through various direct and indirect strategies. From
Figure 4. Drug supply process.
the analysis of the main problems presented in the
supply of medicines in the public sector, five main areas
of risk of failure in the operation were integrated: 1)
planning, 2) acquisition, 3) distribution, 4) prescription
and 5) dispensing. Any failure in any of these stages
compromises the ecient operation of the supply chain
and in turn, implies that the supply of prescription
drugs is not complete for all patients.
Fig. 5shows the analysis of possible problems in
the five stages considered, highlighting the distribution
process with delays in the delivery of medicines,
shortages in pharmacies of medical units, lack of
adequate communication between warehouses and
medical units as well as dierent models of drug
distribution. Distribution models refer to the scheme in
which the distribution of the drug is managed after its
acquisition, for example, the most widely used schemes
are outsourcing or direct distribution.
The analysis of the problems in the medicine
supply chain in the public sector shows areas of
opportunity at each stage. However, the main limitation
for establishing an ecient supply chain lies in the
Figure 5. Problematic of the full drug supply.
operation of multiple agents at each stage of the process.
Therefore, it is necessary to establish regulatory entities
that make it possible to integrate the operation of these
agents if it is not in the daily operation, but a framework
of a public health emergency such as an epidemic.
The Mexican health system is fragmented, this
determines a particular configuration in its operation
and therefore in the related medicine supply chain.
According to what is described in this section, it can
be seen that Mexico faces an important demographic
and epidemiological transition, as well as structural
problems in the supply of medicines in the public
sector. On average 30% of the recipes generated in
the public sector are not filled or are not filled.
Various strategies have been implemented to improve
the supply level; however, much remains to be done.
Therefore, it is necessary to be prepared in the face of
a disruptive event such as an epidemic and design a
supply chain for both supplies and medicines that allow
for an ecient response to contingencies.
2. COVID-19 pandemic in Mexico
In the context of an epidemic, it is necessary to have
a resilient medicine supply chain design. However, in
the case of Mexico, we start from a supply chain of
medicines with structural problems, since a percentage
of unsorted prescriptions derived from the structure of
the health system and the operation of the medicine
supply system is maintained. In this context, at
the beginning of 2020, Mexico faces an enormous
challenge due to the COVID-19 pandemic. According
to information issued by the Ministry of Health, as
of April 28, 77,005 possible cases were registered
[6]. Preliminary data subject to validation by the
Ministry of Health through the General Directorate of
Epidemiology. The information contained corresponds
only to the data obtained from the epidemiological
study of a suspected case of viral respiratory disease
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at the time it is identified in the medical units
of the Health Sector. The records are made by
sentinel surveillance, of the System of Health Units
for Monitoring Respiratory Diseases (USMER for its
Spanish acronym). The USMERs include first, second,
and third-level medical care units.
The information on suspicious cases reported to the
epidemiological surveillance system is validated based
on the tests carried out for the confirmation of positive
cases with COVID-19, the distribution of the data shows
that as of April 28 of the 77 thousand case records
16,752 were confirmed by diagnostic tests, 49,000 cases
were discarded as COVID-19, and 11,000 cases are
still pending confirmation due to the time required to
carry out the tests. Of the total confirmed cases, 42%
correspond to women and 58% to men. (Fig. 6).
Figure 6. Total cases registered by the epidemiological
surveillance system as of April 28, 2020.
The proportion of confirmed cases represents 22%,
negative 64%, and pending results 15%. It is important
to note that although only 22% of the total registrations
as of April 28 were positive, it was necessary to
give attention to the 77 thousand cases received. This
implies that given the health emergency, a greater
number of users go to health services due to the
suspicion of being infected with COVID-19, which in
turn generates a significant increase in the demand for
health services.
The distribution of cases by state entity shows Mexico
City (5,261 cases), the State of Mexico (1,966 cases),
and Baja California (1,410 cases) as the entities with
the highest number of confirmed cases. As of April
28, 2020, it is observed that cases are presented in all
the federal entities, with Colima (25 cases), Durango
(57 cases) and Nayarit (61 cases) being the entities
with the fewest confirmed cases (Fig. 7). According to
the confirmed cases, there is a distribution of their
severity, of the total of confirmed cases, 61% are
ambulatory cases, and 39% required hospitalization.
When analyzing the age groups of the confirmed cases,
we observe that there is a higher concentration of
Figure 7. Distribution of cases by state as of April 28, 2020.
cases in ages ranging from 30-54 years, concentrating
57% of the total number of cases, which implies that
the highest proportion of patients is concentrated in
patients in working age. Patients aged less than 30
years accumulate 14% of the total number of cases and
patients older than 54 years represent 30% of the cases.
(Fig. 8).
Figure 8. Distribution of cases by five-year age group as of April
28, 2020.
Of the total confirmed cases, a total of 1,569
patients have died, which represents 9.4%, which
expressed in terms of a gross mortality rate per
1,000 inhabitants, represents 93.3 deaths per thousand
inhabitants. Presenting the highest number of deaths
in adults over 40 years. The highest mortality rates
are observed in the groups of 75-79 years with 230
deaths per 1000 inhabitants, the group of 80-84 with
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227 deaths per 1000 inhabitants, and the group of 90-
94 years with 222 deaths per 1000 population (Fig. 9).
Figure 9. Deaths and mortality rate by age groups as of April
28, 2020.
Based on the information generated up to April 28,
2020, some important elements are identified, referring
to the states with the highest number of cases, the
mortality observed in groups of older adults, as well
as the presence of diseases related to additional risk
factors. in patients identified as obesity, hypertension,
diabetes, and smoking. Of the total of confirmed cases,
30% developed pneumonia, 22% have hypertension,
and 18% diabetes. 21% of confirmed patients are obese
and 9% report smoking. About specialized services, a
low proportion of confirmed patients has required ICU
services 4.3% and 4.2% have been intubated (Table 2).
The evolution of the COVID-19 pandemic in Mexico
Table 2. Related diseases, risk factor and specialized care of
confirmed cases
Related diseases Cases %of confirmed cases*
Pneumonia 4,942 29.5%
Hypertension 3,640 21.7%
Diabetes 3,064 18.3%
Other complication 696 4.2%
Asthma 585 3.5%
Cardiovascular 473 2.8%
COPD 421 2.5%
Chronic kidney 388 2.3%
Immunosuppression 314 1.9%
Risk factors
Obesity 3,463 20.7%
Smoking 1,496 8.9%
Specialized care
ICU 720 4.3%
Intubated 709 4.2%
is still in evolution, there is no evidence that as of
April 28, 2020, the maximum peak of cases has been
reached, so it is necessary to follow up on the available
information issued by the Secretariat of health. The
available information shows an increase in the demand
for health services given the spread of the pandemic
and that service users come to present some related
symptoms. This implies that there is an unusual peak
in demand in public health services as well as supplies
and medicines. Since the registration of possible cases
implies some attention to the patient (Fig. 10).
Figure 10. Evolution of the cases registered in Mexico as of
April 28, 2020.
In the framework of a structural problem in the
supply chain of medicines (and supplies) in the
public sector in Mexico, it is necessary to define
alternative schemes to solve episodes of sanitary crises
such as the current one. For this, it is necessary
to opt for the integration of innovative technologies
and methodologies that allow a rapid response to a
contingency, seeking to lessen the impact on the health
3. Literature review
In the case of a Health system such as that of Mexico
that has structural problems and a 70% full supply
of medicines, facing a public health challenge such as
the COVID-19 pandemic implies making value-added
proposals that allow face contingencies like the current
one. The design of a resilient medicine supply chain
that can serve as a response to unexpected risks in the
health system requires the participation of the dierent
agents involved in the supply chain, in addition to the
stewardship of the health department that allows the
integration of wills and joint actions.
In the framework of an epidemic, it is necessary
to guarantee medical supplies (medicines, vaccines,
supplies, etc.) in addition to basic products (food,
water, etc.). To guarantee the supply and supply of
these products, it is necessary to have strategic storage
and distribution centers that communicate with the
expected demand points in the event of a contingency.
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It is precisely a problem of designing an emerging
logistics network in the face of disruptive events. For
this, it is necessary to define the number and location
of distribution and collection centers, unloading places
and the location of demand centers, and the selection of
optimal distribution algorithms that guarantee the best
performance of the network. As well as the definition
of the required optimal inventory levels, replacement
policies, transportation, and distribution according to
the health contingency that is being faced.
For the proper design of a network of this nature,
it is necessary to have precise estimates of the
demand required according to the contingency. Studies
have been carried out combining demand estimation
models related to epidemiological models of disease
progression. Authors such as [7] propose a multi-
objective programming model for the selection of
emergency centers and the quantities of drugs to be
transported from the supply sources to the demand
points. In [8], they extend the vision of multi-objective
programming towards a stochastic model using genetic
algorithms for its solution. In [9], they integrate the
analysis of system dynamics to model the dynamic
behavior of the refueling, reception, and dispensing
sources in the case of an anthrax attack. In [10], they
propose a dynamic optimization model with variable
replacement and transport times using heuristic
methods for its solution. Other approaches consider
logistics network designs with one-time supply and
replenishment points [11]. Similarly, there are dierent
versions of the modeling depending on the objective
of the network, which can be to minimize inventory
and transport costs or to minimize response time as a
priority [12] and [13].
Various studies use the hybrid approach where they
combine disease modeling through simulation and
supply chain design through optimization models, [14]
applies this approach to an anti-bioterrorism system. In
[15], they analyze the distribution of medical supplies
in aected areas considering a desirable minimum
level of supply as well as maximum response times
in addition to the associated costs. Similarly, vehicle
routing problems are integrated into a context of
epidemic control, works such as [16], [17] and [18] have
addressed this problem in their logistics designs.
In [19], they show the development of a coordi-
nated supply chain for the distribution of the influenza
vaccine. Taking into account the non-linear demand
given the behavior of the disease and the most eective
immunization strategies, combining the epidemiolog-
ical model with the supply chain. In addition to the
necessary coordination between the government and
the vaccine provider, through shared risk schemes.
The study shows in [20] presents a systematic review
of the health and disaster supply chain literature, espe-
cially in the case of natural disasters. They highlight the
development of methodologies to abort the problem,
based on operational management, information tech-
nology, inventory and control management, strategic
management, and service management. As well as the
application of new technologies for inventory manage-
ment such as the use of RFID.
In [21], they develop a systematic review of relief
distribution networks. Highlighting the contributions
made about three stages defined in an emergency:
a) preparedness and mitigation, b) response, and c)
recovery. To attend to each stage, methodological con-
tributions focused on location and network design,
transportation (relief distribution and casualty trans-
portation), and location and transportation are distin-
guished. Through exact and heuristic methods.
In [22], they present a literature review focused on
epidemic control and logistics operations. Highlight-
ing as a necessary attribute in the face of a health
contingency the need for a quick response and coor-
dination between the sectors involved to guarantee
the supply of medical supplies, human and financial
resources. Highlighting the time horizon in which you
intervene, pre-event, or post-event. Bioterrorism, natu-
ral outbreaks, and disaster aftermath are considered as
possible catastrophic events. The intervention considers
as basic stages: 1) Preparedness, 2) Outbreak, 3) inves-
tigation, 4) Response, and 5) Evaluation. Table 3shows
the main logistical operations and decisions during the
phases of an epidemic outbreak. The main methods
Table 3. Most important logistics operations and decisions during
the phases of the outbreak
Phase Most important logistic operations
Identification of sources
Contract management
Inventory management
Periodical review and updating of medical supplies
Facility location of stockpiling centers
Network design transportation/distribution
Selection of facilities/health
Availability of funds
Outbreak investigation
Provision of appropriate materials
Training of clinical workers
Provision of commodities and resources to the outbreak response
Collection, transportation, and storage of specimens
Procurement, handling, storing and distribution of laboratory commodities
Selection of facilities (PODs)
Review and updating of supplies
Transportation/distributionof supplies and commodities
Procurement of supplies once depleted
Dispensing of medical supplies, supplementary materials, and commodities to the public
Establishment of a cold supply chain for essential medical supplies
Management of human resources
Scheduling available vehicles
Adjustments to the capacity of health care facilities to hospitalize infected people
Management of patients in triage centers
Identification and assessments of possible bottlenecks of delays
Evaluation of timelines that should have been respected
Follow-up and monitoring of patients for the eectiveness of treatments
Identification of patients requiring dose modification of alternative treatment
Development of indicators to evaluate the performance of logisticscontrol operations
Assessment coordination issues
Establishment and operation of rehabilitation procedures
used to analyze the problems associated with the health
supply chain are simulation, game theory, mathematical
modeling, economic analysis, cost-eectiveness analy-
sis, optimization, and analysis of multi-criteria deci-
A recent study by [23] analyzes a reverse logistics
network design for the treatment of medical waste, in
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the framework of the COVID-19 pandemic in Wuhan
(China). The study is of great importance due to the
identification of a high rate of contagion as well as
the residence time of the virus in objects that had
contact with infected patients. Rapid response to the
management of these wastes represents an opportunity
to contain the spread of the epidemic. A multi-objective
and multi-period model of mixed-integer programming
is proposed for the design of the reverse logistics
The challenge is not less considering the complexity
in the prediction of epidemic outbreaks, however, based
on historical data, it has been possible to adequately
model the probability of occurrence and possible
scenarios of the magnitude of the problem. Stochastic
variables and dierent simulation approaches must
necessarily be included to obtain robust models. From
a technical point of view, it is necessary to integrate
innovative elements in supply chain management, such
as the integration of:
Multi-paradigm simulation schemes
Discreet simulation
Dynamic simulation
Agent-based simulation
Optimization algorithms
Disruption event modeling
Risk analysis in the supply chain
The use of data science tools, simulation, and
optimization methodologies will allow ecient and
timely management of the supply chain for medicines
and supplies in a contingency. Currently, there is a
specialized software that allows integrating dierent
paradigms into hybrid models that allow generating
technical evidence for public health decision-making.
4. Resilient supply chain model
In this section, we develop the supply chain design
model for a resilient supply network. We consider the
model into a generalized network. The model is a
mixed-integer linear problem.
Let Kbe the set of manufacturing plants. An element
kKidentifies a specific plant of the company. Let I
be the set of the potential cross-docking warehouses.
An element iIis a specific cross-docking warehouse.
Finally, let J be the set of distribution centers, a specific
distribution center is any jJ. Let Zdenote the set of
integers {0,1} .
4.1. Parameters
Qk= Capacity of plant k.
βi= Capacity of cross-docking warehouse i.
Fi= Fixed cost of opening cross-docking warehouse in
location i.
Gki = Transportation cost per unit of the product from
the plant kto the cross-docking warehouse i.
Cij = Cost of shipping the product from the cross-dock
ito the distribution center (CeDis) j.
dj= Demand of the distribution center j.
4.2. Decision variables
We have the following sets of binary variables to make
the decisions about the opening of the cross-docking
warehouse, and the distribution for the cross-docking
warehouse to the distribution center.
Yi=(1 If location iis used as a cross-docking warehouse,
0 otherwise,
Xij =(1 If cross-dock isupplies the demand of CeDis j,
0 otherwise,
Wki = The amount of product sent from plant kto the
cross-dock iis represented by continuous variables
We can now state the mathematical model as a (P)
problem. See [24].
Wki ,Yi,Xij
Gki Wki +X
Cij djXij
Subject to constraints:
Capacity of the plant
Wki Qk,kK(2)
Balance of product
djXij =X
Wki ,iI(3)
Single Cross-docking warehouse to distribution center
Xij = 1,jJ(4)
Cross-docking warehouse capacity
djXij βiYi,iI(5)
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Demand of items
Wki ,iI(6)
Wki 0,iI , kK(8)
Xij Z,iI , jJ(10)
The objective function (1) considers in the first term
the cost of shipping the product from the plant k
to the cross-docking warehouse i. The second term
contains the fix cost to open and operate the cross-
docking warehouse i. The last term incorporates the
cost of fulfilling the demand of the distribution center
j. Constraint (2) implies that the output of plant
kdoes not violate the capacity of plant k. Balance
constraint (3) ensures that the amount of products that
arrive to a distribution center jis the same as the
products sent from the plant k. The demand of each
distribution center jwill be satisfied by a single cross-
docking warehouse i, this is achieved by constraint
(4). Constraint (5) bounds the amount of products that
can be sent to a distribution center jfrom an opened
cross-docking warehouse i. Constraint (6) guarantees
that any opened cross-docking warehouse ireceives at
least the minimum amount of demand requested by a
given distribution center j. Constraint (7) ensures that
the minimum demand of each distribution center jis
considered. Finally, constraints (8), (9) and (10) are the
non-negative and integrality conditions.
5. Case study
In this section, we describe the case study. In particular,
we consider the pharmaceutical supply chain in Mexico.
The supply chain is made up of four echelons:
two factories, one central-distribution center, three
regional-distribution centers and thirty-two wholesale
drug distributors. These facilities and clients are
scattered throughout the country. Figs 11 and 12
represent the current structure of the supply chain.
The case study consists of finding a resilient solution
that allows the supply chain to react eciently to a
disruption. The distribution centers will be the facilities
subjected to hypothetical scenarios of disruption.
Table 4shows the disruption scenarios considered.
All network diagrams were implemented in
cytoscape software, see [25].
Figure 11. CDC-Factory links.
Table 4. Scenarios addressed in the case study
Scenario Disruption Breakdown time
I One factory is closed due to health contingency 45 days
II One DC is closed 30 days
III All facilities are closed 15 days
5.1. Solution methodology
The solution methodology used in this research is based
on simulation-optimization. The anylogistix software
was used to develop the "what if" methodology. This
software uses CPLEX as an optimization engine to find
the best solutions within a set of possible solutions.
First, the current situation of the pharmaceutical
company’s supply chain is modeled. Subsequently,
the elements or facilities that make up the supply
network are optimized. Several operating policies of
the chosen supply network are simulated. Finally,
disruptive events are generated to test the resilience
of the proposals to the previously defined disruption
scenarios, see fig 13.
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Figure 13. Inventory Policies and Demand
5.2. Computational results
Considering the three dierent scenarios, it was found
that scenarios I and II are those that cause the
greatest negative impact on the operation of the supply
chain. For this, and for reasons of extension of the
document, analysis of results shows the performance
indicators for scenario I and scenario II. After running
the optimization and simulation routines, the results
obtained are as follows.
In the first instance, performance indicators for
the current structure of the company were analyzed
without disruption. Afterwards, the various scenarios
were simulated. The variation experiment function,
incorporated in ALX, was used to compare various
key performance indicators. Fig. 15 shows the current
supply chain network structure.
For scenario I, the service level by product, the
available inventory of all the facilities and the average
delivery time are shown in figs. 17,18 and 19,
Scenario II, see fig. 12, as mentioned above, was
the one with the greatest disruptive eects and it is
the scenario that generates less profits. As seen in fig.
20, the level of service deteriorated to levels of 60%
and 40% for each product. Figs. 21 and 22, shows the
available inventory and lead-time.
Once scenario II has been optimized, see fig. 14, the
results of the key performance indicators are reflected
in Table 5. In this scenario, the highest profits are
generated with a service level above 95%, see fig. 23.
The available inventory and lead time are shown in figs.
24 and 25. Finally, the proposal to optimize scenario II
is shown in fig. 16.
6. Conclusions
According to the scenarios outlined for the company,
the epidemic outbreak of COVID-19 in Mexico caused
several disruptions in the supply chain of medicines.
Table 5. Key performance indicators of proposal solution
Available Inventory 682342.6764 pcs
Demand (Products Backlog) 0 pcs
Demand Placed (Products) by Customer 1061896.722 pcs
Demand Received (Products) 2483056.467 pcs
Fulfillment Received (Products On-time) 1050395.745 pcs
Fulfillment Received (Products) 1421159.745 pcs
Fulfillment Shipped (Orders) 393 Order
Peak Capacity 989528 pcs
Products Produced 1545502.421 pcs
Profit 3.52E+08 USD
Service Level by Products 0.989169401 Ratio
Total Cost 3715253.767 USD
Transportation Cost 3715253.767 USD
Traveled Distance 41252.88728 km
Figure 14. Several CDCs.
Figure 15. Current Supply Chain Network.
Figure 16. Supply Chain Network proposal.
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Figure 17. Service Level of Scenario I.
Figure 18. Available Inventory of Scenario I.
Figure 19. Lead-Time of Scenario I.
Figure 20. Service Level of Scenario II.
The solution methodology based on a simulation-
optimization approach, allows analyzing the impacts
Figure 21. Available Inventory of Scenario II.
Figure 22. Lead-Time of Scenario II.
Figure 23. Service Level of Scenario II Optimized.
Figure 24. Available Inventory of Scenario II Optimized.
of the dierent recovery strategies for a subsequent
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Designing a resilient supply chain: An approach to reduce drug shortages in epidemic outbreaks
Figure 25. Lead-Time of Scenario II Optimized.
epidemiological outbreak. Additionally, the proposed
approach allows enable a comprehensive view of the
supply network, as well as fast and ecient responses
to risky situations and changing.
Mexico has great health challenges, it is going
through a demographic and epidemiological transition
where chronic degenerative diseases predominate. The
public sector medicine supply chain in Mexico has sev-
eral structural problems related to the characteristics
of the Health System. In 2018, the percentage of a full
supply of medications represented 70%, historically
maintaining a percentage of prescriptions not filled,
which implies that the patient must expend out-of-
pocket expenses to acquire their medications or not take
Starting from this deficient structure of the medicine
supply chain in the public sector, facing an epidemic
such as the case of COVID-19 represents a very
important challenge for the Mexican health system. The
present pandemic has represented a significant increase
in the demand for public health services. As of April
28, 2020, a total of 77 thousand probable cases were
registered in the epidemiological surveillance system,
of which 16,752 cases were positive with COVID-19.
The crude mortality rate represented 93.3 deaths per
1000 inhabitants, and adults and older adults with some
chronic disease are mainly aected.
In this context, the need for a supply chain for
medicines and supplies that allows dealing with
external events such as a pandemic is evident. For
this, it is necessary to take into account innovative
concepts of supply chain management, simulation, risk
analysis, and optimization. Being able to have robust
and ecient designs will allow us to react quickly to
a contingency.
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... In addition, supply chains face environmental uncertainty, capacity planning, and inventory management [4]. Responding to the complexity of the drug supply chain, Lozano-Diez et al. [5] suggest taking advantage of technological developments. ...
... Decisions about ordering drugs from manufacturers and distributors are in these two units, as are decisions about managing drug storage and distribution. Lozano-Diez et al. [5] show in Figure 2, the five main areas of risk of failure of integrated operations in the case of drug supply in the public sector. Dispensing pharmacy is the meeting point of drug production and drug demand. ...
... Zahiri et al. [6] stated that the problem must be local and not stop production at the primary producer level. Whereas in the area of demand, the participation of many agents and regulators is an effort to maintain drug supply in joint action [5], [6]. Figure 2. Drug supply process [5] Previously, Anaya-Arenas et al. [24] said that management needs to have a level of preparedness and mitigation, response, and recovery in an emergency. A resilient supply chain is able to identify risks, ameliorate impacts, and return quickly from human or natural events [25]. ...
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The drug supply chain is inherently complex. The challenge is not only the number of stakeholders and the supply chain from producers to users but also production and demand gaps. Downstream, drug demand is related to the type of disease outbreak. This study identifies the correlation between drug supply chain management and the use of predictive parameters in research on the spread of disease, especially with machine learning methods in the last five years. Using the Publish or Perish 8 application, there are 71 articles that meet the inclusion criteria and keyword search requirements according to Kitchenham's systematic review methodology. The findings can be grouped into three broad groupings of disease outbreaks, each of which uses machine learning algorithms to predict the spread of disease outbreaks. The use of parameters for prediction with machine learning has a correlation with drug supply management in the coronavirus disease case. The area of drug supply risk management has not been heavily involved in the prediction of disease outbreaks.
... Estimations indicate that a severe global pandemic or a temporary change can lead to an average GDP loss of 6.7%, with a loss of 8.4%, both for the USA as for the euro area. According to the Organization for Cooperation and Development Economic Development, global economic growth may fall by half in 2020, in the worst scenario for the Covid-19 outbreak [79]. ...
... In this context, it is important to rethink supply chain for medicines and supplies, creating a more resilient and innovative management. The use of simulation, risk analysis, and optimization should become regular, being able to be lean and agile [22], [79], [80]. Table 3 is a brief description of the most important operations and decisions to be performed during an outbreak. ...
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The current situation of healthcare units is characterized by the increasing cost of providing the respective care, the consequent deterioration of the financial situation and the complicated and time-consuming processes. Allied to the growing demand, they could become factors that make the service demand deficient. Due to this situation, more efficient and effective logistics and supply chain management is transversally recognized as one of the main areas for improvement. In order to provide insight on which areas to improve, several objectives where looked after in this work, as the analysis of the methods and criteria for the selection of medicines in hospital pharmacies, the definition of obstacles to the rational management of stocks and analysis of historical data to forecast future demand of a Portuguese public hospital. The study revealed that some of the 1346 products present on the pharmacy’s ERP do not have sufficient historical data to create an accurate forecast. With this context, and considering a service level of 99%, 41% of products have a stock higher than what should be the maximum stock, approximately € 147.908,87 of fixed assets and 11% of the products were, at the time, at risk of going out of stock. The importance of the evolution of core information system of Hospitals was at stake, ensuring the technological sustainability of the ongoing digital transformation, alignment with ICT rationalization measures, improvement of customer service and improvement of the quality of information available to the user. On a side note, considering the current event of pandemics, it was analyzed its impact on hospital supply chain. The change in the behavior of hospital patients led to two clear breaks in two relevant indicators, the number of hospital visits and spending on medication. These indicators show that there is less demand for scheduled hospital services, 1,9M less consultations carried out in Portuguese Public Hospitals. In these times, the capacity for hospital care and intensive care is exceeded, creating a significant challenge. In Portugal, as the impact of the pandemic on medication consumption nationwide, it was predicted an additional cost of € 103M by the end of the year, higher than in previous years.
... The COVID-19 pandemic in the pharmaceutical sector has contributed on the one hand to increased turnover and revenue [5,6], and on the other hand to reduced employment [7][8][9]. Changes in the pharmaceutical sector competitiveness [10], the changes in demand as well as shortages and supply disruptions [11], stockpiling, changes in employment [9], regulations and types of employment [12,13], the introduction of ICT technologies in the early diagnosis and detection of COVID-19 [14], communication with patients and healthcare professionals have been identified as important research subjects in the current literature. Accordingly, Elsheikh et al. [15] indicate that artificial intelligence should help researchers, experts and policy makers to develop more accurate prediction models and improved strategies to control the spread of this pandemic, to enable sustainable economic success. ...
... The authors point out that at the beginning of the pandemic, there was a decrease in the start of systemic treatments, i.e., anti-cancer treatments in England. The availability of non-COVID-19 drugs was compromised [11,21], further complicating the treatment of chronically sick patients [57][58][59][60]. The situation later changed, which was influenced by factors to reduce clinical and social risk (such as telephone consultations, face masks, and physical distancing). ...
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The research subject of this paper is the analysis of the attitudes of employees in pharmaceutical companies towards the business aspects of the pharmaceutical industry during and after the end of the pandemic in the Republic of Serbia. The aim is to examine the differences in the attitudes of employees, as well as to determine which variables predict the situations of endangering the professional reputation of pharmaceutical companies during the COVID-19 pandemic. The research was conducted by means of a survey during 2021 on a sample of 27 innovative and generic pharmaceutical companies. We used the SPSS program for descriptive statistics analysis, chi square test and binary logistic regression models. The findings show that there is a statistically significant difference in the expressed attitudes of employees in innovative and generic pharmaceutical companies in terms of coming to the office during the pandemic; the lack of medicines and medical devices used in the treatment of COVID-19 infections; the patient access to a chosen doctor; the expectations of the employees to continue working from home after the outbreak of the COVID-19 pandemic. The findings of the binary regression models show the slowdown in the supply chain, the access to doctors and working from the home office have not been perceived as creating situations of endangering professional reputations, that is, they contribute to the sustainable economic success. On the other hand, the introduction of digital technologies decreases the occurrence of conditions in which their professional reputation has been threatened.
... According to this study, CMS managed the supply chain by adopting various strategies and collaborating with its key stakeholders to manage the supply chain. The findings of this study are supported by several studies which focused on how firms are managing the impact of the COVID-19 pandemic on the pharmaceutical supply chain [6][7][8][9][10]. The results suggested that CMS employed efficient distribution of pharmaceuticals to help expedite the supply. ...
... Similar to this study's findings, Butt [11] affirmed that buying firms should actively negotiate with their key suppliers to comprehensively understand their inventory, production schedules, and purchase order fulfillment status. Also, Lozano-Diez et al. [7] agree with Mehrotra et al. [8] that enhancing production early by taking speedy decisions can mitigate pharmaceutical supply chain disruption during the COVID-19 pandemic. ...
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The COVID-19 pandemic has negatively impacted Namibia&s public sector pharmaceutical supply chain. This study aimed to investigate the strategies for mitigating pharmaceutical supply chain disruption during COVID-19 using Central Medical Stores Namibia as a case study. The study employed a case study design to explore the research area intensively. Unstructured interviews were conducted with seven pharmacists from Central Medical Stores who were purposively selected. Data were analyzed using thematic analysis with the aid of ATLAS.ti software. Seven (7) pharmacists working at Central Medical Stores were included in this study. The participants highlighted various thematic issues reflecting the impact of COVID-19 on medicines procurement, access and distribution within the healthcare system. These themes included managing the supply chain during the COVID-19 pandemic; COVID-19 pandemic-induced supply chain challenges; Approaching supply chain challenges; medicines shortages; and looking into the future. The study found that there needs to be government intervention to encourage local manufacturing, international intervention to prevent the hoarding of pharmaceuticals by rich nations, adoption of long-term procurement contracts, establishing of good communication with suppliers, having a sufficient budget for pharmaceuticals, training employees in supply chain management and adequate storage space in order to mitigate pharmaceutical supply chain challenges at the Central Medical Stores during COVID-19.
... Among the earliest studies after the coronavirus phenomena, [39] mold the production recovery vision into an optimization model in order to reach the highest profitability for necessary supplies during the pandemic. Next, [40] concentrated on the pharmaceutical supply network, underscoring the imaginable shortage of essential drugs due to disruption triggered by the novel virus. In addition, [41] can be attributed as the forerunner scholars that took into account the vaccine allocation and distribution. ...
Pandemics, such as the Influenza virus and the contemporary COVID-19, can lead to widespread disruptions in key segments, including the supply chain, beyond the capacity of communities or governments. The establishment of a robust relief supply chain network can alleviate the destructive effects of pandemics and strengthen the distribution of relief supplies across medical centers and demand zones. Furthermore, the Internet of Medical Things (IoMT), which connects medical devices and applications over the internet, provides healthcare providers with real-time data collection, transmission, and sharing. Considering this motivation, in this work, a multi-objective sustainable network is firstly modeled mathematically to not only curb the direct flow of relief supplies among specific components, but also to operate the reverse flow of waste within the network. Furthermore, in accordance with the Sustainable Development Goals (SDGs), the model emphasizes the energy consumption of critical activities like production and transportation. Additionally, an IoMT configuration is propounded to strengthen the mathematical model with real-time data. metaheuristic optimizers are effective toolkits owing to the NP-hardness of the model. To ensure that the model is compatible and applicable under varying conditions, a suite of tuned metaheuristic optimizers is utilized as well as five scales of test problems. Additionally, the performance of optimizers is examined using a number of recognized performance indicators. The normality of the results is evaluated through statistical tests, namely the Kolmogorov-Smirnov and Shapiro-Wilk tests. Following this assessment, a comprehensive analysis is carried out using the Wilcoxon test and Paired-Samples T Test to compare the results in a pairwise manner, while maintaining a significance level of 0.05. The outcomes derived from these tests reveal the presence of significant disparities among the performance indicators. To ascertain the algorithm with superior performance, an evaluation is conducted using interval plots and the Friedman test, considering each individual performance indicator. The empirical evidence derived from this analysis indicates that the Multi-objective Seagull Optimization Algorithm (MOSOA) exhibited the highest overall mean rank score of 1.93, surpassing other metaheuristic algorithms in terms of performance.
... Moreover, Lozano-Diez et al. (2020) studied the effect of RSC on medicine shortages during disease outbreaks. The case study was resolved using the optimization and simulation program anyLogistix. ...
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... Chowdhury and Quaddus (2016) put forward many SCR strategies for the current vulnerability, which mainly focus on three dimensions, namely, preparation, response and recovery. In order to minimize the impact of the shortage of basic living resources, scholars put forward various countermeasures, such as resuming production as soon as possible or increasing the production of related products (Lozano-Diez et al., 2020). Managers can reallocate existing resources, such as redeploying resources from non-priority areas or redeploying employees from non-essential activities, to promote the normal production of basic living materials (Leite et al., 2021). ...
Building an effective resilient supply chain system (RSCS) is critical and necessary to reduce the risk of supply chain disruptions in unexpected scenarios such as COVID-19 pandemic and trade wars. To overcome the impact of insufficient raw material supply on the supply chain in mass disruption scenarios, this study proposes a novel RSCS considering product design changes (PDC). An RSCS domain model is first developed from the perspective of PDC based on a general conceptual framework, i.e., function-context-behavior-principle-state-structure (FCBPSS), which can portray complex systems under unpredictable situations. Specifically, the interaction among the structure, state and behavior of the infrastructure system and substance system is captured, and then a quantitative analysis of the change impact process is presented to evaluate the resilience of both the product and supply chain. Next, a case study is conducted to demonstrate the PDC strategy and to validate the feasibility and effectiveness of the RSCS domain model. The results show that the restructured RSCS based on the proposed strategy and model can remedy the huge losses caused by the unavailability of raw materials.
Full-text available
The outbreak of an epidemic disease may pose significant treats to human beings and may further lead to a global crisis. In order to control the spread of an epidemic, the effective management of rapidly increased medical waste through establishing a temporary reverse logistics system is of vital importance. However, no research has been conducted with the focus on the design of an epidemic reverse logistics network for dealing with medical waste during epidemic outbreaks, which, if improperly treated, may accelerate disease spread and pose a significant risk for both medical staffs and patients. Therefore, this paper proposes a novel multi-objective multi-period mixed integer program for reverse logistics network design in epidemic outbreaks, which aims at determining the best locations of temporary facilities and the transportation strategies for effective management of the exponentially increased medical waste within a very short period. The application of the model is illustrated with a case study based on the outbreak of the coronavirus disease 2019 (COVID-19) in Wuhan, China. Even though the uncertainty of the future COVID-19 spread tendency is very high at the time of this research, several general policy recommendations can still be obtained based on computational experiments and quantitative analyses. Among other insights, the results suggest installing temporary incinerators may be an effective solution for managing the tremendous increase of medical waste during the COVID-19 outbreak in Wuhan, but the location selection of these temporary incinerators is of significant importance. Due to the limitation on available data and knowledge at present stage, more real-world information are needed to assess the effectiveness of the current solution.
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A method to solve the design of a distribution network for bottled drinks company is introduced. The distribution network proposed includes three stages: manufacturing centers, consolidation centers using cross-docking, and distribution centers. The problem is formulated using a mixed-integer programming model in the deterministic and single period contexts. Because the problem considers several elements in each stage, a direct solution is very complicated. For medium-to-large instances the problem falls into large scale. Based on that, a primal-dual decomposition known as cross decomposition is proposed in this paper. This approach allows exploring simultaneously the primal and dual subproblems of the original problem. A comparison of the direct solution with a mixed-integer lineal programming solver versus the cross decomposition is shown for several randomly generated instances. Results show the good performance of the method proposed.
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Healthcare and disaster supply chain have becoming a more important and popular research issues recently. However, only a few of paper is known about the current issues both healthcare and disaster supply chain especially in natural disaster case. This paper is a preliminary report of a research on healthcare and disaster supply chain. The paper intends to review and analyse several papers on above topic published during the last ten years. Published papers on healthcare and disaster supply chain research from 2005 and 2014 were classified into three main themes: (1) healthcare supply chain, (2) disaster supply chain and (3) healthcare supply chain in natural disaster. The topic issues in each main themes include operational management, information technology, inventory and control management, strategic management, and service management. Besides, the type of research methods contain empirical study, case study, modelling and simulation, literature review, and conceptual theory. Result of the review will provide the basis for the direction of future research in these three themes.
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Outbreaks of epidemics account for a great number of deaths. Communicable or infectious diseases are also a major cause of mortality in the aftermath of natural or man-made disasters. Effective control of an epidemic outbreak calls for a rapid response. Available resources such as essential medical supplies and well-trained personnel need to be deployed rapidly and to be managed in conjunction with available information and financial resources in order to contain the epidemic before it reaches uncontrollable or disastrous proportions. Therefore, the establishment and management of an emergency supply chain during the containment effort are of paramount importance. This paper focuses on defining the role of logistics operations and their management that may assist the control of epidemic outbreaks, critically reviewing existing literature and pinpointing gaps. Through the analysis of the selected literature a series of insights are derived and several future research directions are proposed. In conclusion, this paper provides both academics and practitioners with an overview of literature on epidemics control and logistics operations aiming at stimulating further interest in the area of epidemics control supply chain management.
When a public health emergency, such as an anthrax attack, happens in many areas, it is necessary to deploy the medical supplies to the affected people quickly. In this condition, the emergency logistics network based on integrated supply chain, which is made up of the points of dispensing, emergency centers, and replenishment sources, is proposed to response to the emergency. In order to compare its effect, the traditional emergency logistics network is introduced. Then multi-objective programming models for the two kinds of networks under many scenarios about the anthrax attack are constructed. From the practical example, we can draw up that: the cost of the integrated mode is always lower than the traditional mode. The transportation duration of the integrated mode is higher than the traditional mode when the treatment rate is 0.4. However, the integrated mode is lower than the traditional mode as the treatment rate increases.
To optimize the process of materials distribution in anti-bioterrorism system and improve the emergency relief timeliness, emergency materials distribution problem in system of anti-bioterrorism was constructed to be a multiple traveling salesman problem (MTSP) in paper the authors have done before. In that paper, knowledge of graph theory was used to transform the MTSP to be a TSP, then such TSP route was analyzed and proved to be the optimal Hamilton route theoretically. Besides, a new hybrid genetic algorithm was designed for solving the problem. However, only length of the route was considered as the objective function, while time windows, another much more important factor was neglected. In this paper, the MTSP with time windows is studied, and the best equilibrium solution of emergency materials distribution is obtained via numerical simulation. Moreover, combine with the SIR epidemic model, relationship between the parameters and the results are discussed. The research results show that the best emergency materials distribution scheme can be found by the method proposed in this paper effectively, which have a certain guiding significance for the actual emergency rescue work.
In the last 20 years, Emergency Management has received increasing attention from the scientific community. Meanwhile, the study of relief distribution networks has become one of the most popular topics within the Emergency Management field. In fact, the number and variety of contributions devoted to the design or the management of relief distribution networks has exploded in the recent years, motivating the need for a structured and systematic analysis of the works on this specific topic. To this end, this paper presents a systematic review of contributions on relief distribution networks in response to disasters. Through a systematic and scientific methodology, it gathers and consolidates the published research works in a transparent and objective way. It pursues three goals. First, to conduct an up-to-date survey of the research in relief distribution networks focusing on the logistics aspects of the problem, which despite the number of previous reviews has been overlooked in the past. Second, to highlight the trends and the most promising challenges in the modeling and resolution approaches and, finally, to identify future research perspectives that need to be explored.
To find the efficient logistics strategy for the anthrax attack, the anthrax progression model and emergency logistics model under the traditional and collaboration modes are constructed based on the System Dynamics (SD) approach. Then, a combination mode that integrates the two modes is proposed. Through the simulation, we analysed some factors which can affect the rescue effect, and we studied which mode is the best logistics strategy response to the anthrax attacks. This study provides insights for the decision-makers who cope with the emergency events, such as the bioterrorists attacks.
Demand for emergency resources is usually uncertain and varies quickly in anti-bioterrorism system. Besides, emergency resources which had been allocated to the epidemic areas in the early rescue cycle will affect the demand later. In this article, an integrated and dynamic optimisation model with time-varying demand based on the epidemic diffusion rule is constructed. The heuristic algorithm coupled with the MATLAB mathematical programming solver is adopted to solve the optimisation model. In what follows, the application of the optimisation model as well as a short sensitivity analysis of the key parameters in the time-varying demand forecast model is presented. The results show that both the model and the solution algorithm are useful in practice, and both objectives of inventory level and emergency rescue cost can be controlled effectively. Thus, it can provide some guidelines for decision makers when coping with emergency rescue problem with uncertain demand, and offers an excellent reference when issues pertain to bioterrorism.
Quick and accurate response to the relief demand is vital to an emergency logistics network under disaster spreading. In this paper, we first characterize the disaster spreading process to forecast the time-varying relief demand, by using an epidemic model to analyze the relationships among three groups of affected individuals. Then, a new three-tiered emergency logistics network equilibrium model is formulated to satisfy the predicted urgent demand with the least relief cost, in particular the time cost. We perform numerical simulation to demonstrate the effectiveness of our model, and discuss the impact of the important parameters.