Efficient resource sharing for strategic disaster preparedness

Abstract

Disasters, such as the COVID-19 pandemic, cause critical supply shortages and require the immediate injection of additional resources. Governments often set aside capacity for use during crises or opt to rely on third parties, such as the private sector. Both options, however, may not be viable, as the former is expensive and the latter is not reliable. To overcome this dilemma, we introduce a strategic disaster preparedness framework in which the government engages private suppliers by investing in a portion of their resources, in return for access when needed. The resources are maintained and used by suppliers in their routine operations unless required for an emergency. We introduce a Stackelberg game-theoretic model that captures the interaction between the government and private suppliers under a limited budget and characterize key structural properties of optimal disaster preparedness plans. These properties lead to single-level reformulations and efficient exact and approximation algorithms under certain conditions. We test the proposed models on a case study based on major disasters affecting Canada. Findings indicate that incorporating resource sharing into emergency preparedness planning leads to more than a 26% increase in social good or more than a 13% decrease in cost compared to traditional preparedness plans. The study underscores the value of the proposed approach for strategic disaster preparedness and provides important insights into public policy.