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In response to the increasing threat of terrorist attacks and natural disasters, governmental and private organizations world-wide have invested significant resources in disaster planning activities.
 

Summary: Abstract
In response to the increasing threat of terrorist attacks and natural disasters, governmental and
private organizations world-wide have invested significant resources in disaster planning activities.
This paper addresses joint inventory stockpiling of medical supplies for groups of hospitals prior to
a disaster. Specifically, we consider the problem of determining the stockpile quantity of a medical
item at several hospitals. We assume demand is uncertain and driven by the characteristics of a
variety of scenarios of a disastrous event. Further, we assume hospitals have mutual aid agreements
for inventory sharing in the event of a disaster. Each hospital's desire to minimize its stockpiling
cost together with the potential to borrow from other stockpiles creates individual incentives well
represented in a game theoretic framework. We model this problem as a non-cooperative strategic
game, prove the existence of a Nash equilibrium, and analyze the equilibrium solutions. We also
examine a centralized model of stockpile decision making where a central decision-maker optimizes
the entire system, and we compare the solutions to those of the decentralized (game) model. The
comparison provides some managerial insights and public health policy implications valuable for
disaster planning.
1 Introduction
The U.S. healthcare system faces challenges from disastrous events. A timely example is the
recent outbreak of H1N1 influenza pandemic. In the U.S., the reported percentage of visits for
influenza-like illness (ILI) of Week 40 (ending October 10, 2009) is 6.1% of all visits, almost 3
times higher than the national baseline of 2.3% (The Centers for Disease Control and Prevention

  

Source: Adida, Elodie - Department of Mechanical and Industrial Engineering, University of Illinois at Chicago

 

Collections: Engineering