Integrated Vehicle Routing Problem with Explicit Consideration of Social Costs in Humanitarian Logistics

A review of the literature indicates that most formulations for humanitarian logistics are extensions of methods for commercial applications that do not fully account for the particular challenges in humanitarian operations. In contrast to commercial logistics, operational costs are of secondary importance for humanitarian logistics since responders are frequently more concerned about allocating their limited resources in such a way that they maximize the benefits to the affected population. In this context, human welfare at the sites impacted by extreme events can be considered as an externality cost derived from the distribution strategy. This research considers the loss in welfare associated with victims not having access to critical commodities as a social cost that should be priced and incorporated to the decision making process. Following this approach to humanitarian logistics modeling, this paper presents formulations for vehicle routing in which the optimal solution is the strategy minimizing the total costs incurred in responding to the emergency, as determined by both operational and social considerations. These formulations provide a new and integrated perspective to humanitarian logistics because they recognize the significant impacts that logistical decisions may have on the victims’ wellbeing and vice versa.