CSTIO Seminar with Professor Fang Liu (Durham University)

Integrated Virtual Stockpile Pooling and On-Event Retrieval for Efficient Emergency Response

Abstract

To mitigate warehousing and spoilage costs in emergency supply stockpiling, governments often partner with private companies to distribute emergency supplies across various locations in the commercial supply chain for regular demand rotation. Commonly, a “red line” is assigned to each location, with inventory below this line reserved solely for emergencies. Previous literature has proposed a Virtual Stockpile Pooling (VSP) strategy that dynamically adjusts red lines among the locations based on real-time demand information, omitting the emergency retrieval process. This study introduces an Integrated Virtual Stockpile Pooling and On-Event Retrieval (VSPR) strategy that refines VSP by incorporating emergency retrieval costs into its design. We present a novel ranking method to solve VSPR’s three-stage optimization process, leading to a collaborative base-stock system, a priority-based red-line reassignment, and a greedy algorithm for efficient supply retrieval. We show that VSPR strategically reserves supplies at “key locations”, optimizing cost and response efficiency. A case study demonstrates that, compared with VSP, VSPR has the potential to reduce operational costs by up to 13.8% while enhancing service levels by up to 4.9%. VSPR’s applicability extends to many other contexts, including resilient supply chain management, healthcare operations, energy and natural resource management, and military logistics.

Biography

Professor Fang LIU is currently a Professor of Operations Management at the Durham University Business School (DUBS). She has a doctoral degree in Operations Management from Fuqua School of Business, Duke University, USA. Her research interests are in Supply Chain Management and Corporate and Social Responsibility mainly focused on applying inventory management and mechanism design to achieve supply chain efficiency. She has conducted excellent research and published many papers in publishes in several FT top 50 journals including Operations Research, Manufacturing & Service Operations Management, and Production and Operations Management. Professor Liu has secured multiple competitive research grant funding in Singapore (MOE-Tier 2 grant) and China (Overseas Excellence Young Scholar grant) either as a Primal Investigator or co-Primal Investigator. She joined Durham University in 2023 from The University of Chinese Academy and before that, she worked at Nanyang Technological University. Professor Liu has worked with several public/private and third-sector organizations in assisting them in improving their operations including Cummins, Singapore IFRC, Meide, and so on.