Title: Cost-effectiveness optimisation for a location-routing problem in humanitarian logistics

Authors: Xihui Wang; Tongxin Liu; Yu Fan; Liang Liang

Addresses: School of Management, University of Science and Technology of China, Hefei, China ' School of Management, University of Science and Technology of China, Hefei, China ' International Institute of Finance, School of Management, University of Science and Technology of China, Hefei, China ' School of Management, University of Science and Technology of China, Hefei, China

Abstract: The alleviation of human suffering and cost savings are two widely considered issues that need to be balanced by relief organisations in responding to a disaster. Due to the complexity of disasters, a 'one-fits-for-all' approach for achieving this balance does not exist. Recently, sometimes in China, the local authorities emphasise cost-effectiveness maximisation, i.e., the effectiveness that a unit of cost can produce. Motivated by this current practice situation, we aim to build an appropriate cost-effectiveness objective and assess its strength and efficacy. We consider here a location-routing problem and build a mathematical programming model, based on which we make a comparison between cost-effectiveness maximisation and social cost minimisation through a numerical experiment and a larger scale case study. The results show that cost-effectiveness provides a more balanced delivery strategy, which substantially decreases the logistics costs at a minimal sacrifice to the operation's human benefits.

Keywords: humanitarian logistics; location-routing; cost-effectiveness; social costs; fractional programming; deprivation cost.

DOI: 10.1504/IJSTL.2024.142361

International Journal of Shipping and Transport Logistics, 2024 Vol.19 No.1, pp.1 - 35

Received: 17 Feb 2022
Accepted: 21 Mar 2023
Published online: 25 Oct 2024 *

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