Prof. Dr. Andreas K. Gernert

Diversity, equity, and inclusion are at the core of present-day health and humanitarian logistics. Aid organizations advocate inclusive people-centered approaches to ensure that affected communities receive appropriate aid in an effective and equitable way. Tensions and even conflicts can arise if affected communities perceive the distribution of aid as inequitable. These perceptions are driven by people’s so-called distributional preferences. These preferences are shaped by culture, social bonds, and experiences, and they describe how an individual’s well-being and behavior are impacted by potential inequalities. Their importance is increasingly recognized by aid organizations, but research on equity in health and humanitarian logistics remains focused on equal access and prioritizing needs. Using current examples from the Syrian and Rohingya refugee crises, we show the importance of recognizing and managing distributional preferences. Based on these examples and in line with diversity, equity, and inclusion principles, we discuss several ways that we, as the operations community, can help conceptualize inclusive and people-centered approaches that account for distributional preferences.

Problem definition: Emergency medical services (EMS) in many low- and middle-income countries utilize decentralized platforms coordinating independent ambulance providers. However, significant operational challenges arise from uncertainty in provider time availability and unpredictable idle locations. These uncertainties hinder reliable service coverage and negatively impact patient outcomes. Using data from our East-African partner Rescue.co regarding the operations of their emergency platform, Flare, in Nairobi, Kenya, we investigate the relative effectiveness of enhancing provider temporal commitment (time availability) versus spatial commitment (strategic location) to improve system coverage. Methodology/results: We employ optimization models tailored to ambulance commitment uncertainty, a detailed case study, data-driven simulations, and a game-theoretic model. Our findings quantify a stark “cost of decentralization”: The coverage provided by Flare’s 340 loosely committed ambulances could potentially be matched by fewer than 15 optimally deployed fully committed units. We find that enhancing spatial commitment typically yields substantially larger coverage gains than increasing time availability alone and that both dimensions are strongly complementary. Simulations validate these effects under stochastic demand, simultaneous calls, and strategic relocation. A stylized free-entry model, in which time- and spatially committed providers enter until profits vanish, shows that spatial commitment dominates except at very low temporal availability and that adding spatially committed units typically yields higher marginal value by filling geographic gaps. Together, all three approaches highlight the significant value of spatial coordination. Managerial implications: For managers of decentralized EMS platforms, the main priority should be to enhance spatial coordination. This can be achieved by deploying a small number of platform-controlled, location-flexible units or by incentivizing providers to relocate strategically, both of which are especially effective at closing the system’s most critical coverage gaps. Because these benefits persist even when accounting for stochastic demand, simultaneous calls, and potential strategic behavior by independent providers, managers need not account for every contingency when evaluating interventions; focusing on closing persistent geographic gaps yields robust performance gains in resource-constrained settings.

Several low- and middle-income countries’ emergency transportation systems (ETSs) do not have a centralized emergency number. Instead, they have many independent ambulance providers, each with a small number of ambulances. As a result, ETSs in these contexts lack coordination and ambulances. Using a free-entry equilibrium model, we show that in such decentralized systems, the probability that any given call can be served by at least one ambulance, that is, its coverage, is at most 71.54%, regardless of the ETS’s profitability. We examine three business models that can address the ETS’s lack of coordination and ambulances: (i) a competitor-only business model, where an entrepreneur enters the ETS and acquires ambulances to compete with existing providers; (ii) a platform business model, where an entrepreneur coordinates existing providers; and (iii) an innovative platform-plus business model, where an entrepreneur combines (i) and (ii): setting-up a platform and acquiring platform-owned ambulances. We also examine a government-run platform that takes no commissions from providers. Using a game-theoretic approach, we find that it is optimal for all platform models to incentivize all providers to join. However, only the government-run platform may incentivize providers to acquire additional ambulances. Furthermore, a government-run platform offers higher coverage than a platform-plus only when the platform’s power to coordinate ambulance providers is moderate. Our results can help entrepreneurs and policymakers in LMICs navigate various tradeoffs in improving their countries’ ETS.

To maintain future supplier competition, manufacturers may support financially distressed suppliers by sourcing from them, even if they are less efficient than competitors, and by procuring larger quantities from them at higher prices. We analyze these strategies in a model in which a manufacturer decides for one of two available suppliers, supplier bankruptcy risk is endogenous, and financial distress can lead to internal or external reorganization. Following bankruptcy, the remaining supplier may serve as a backup option. Our research identifies settings in which the manufacturer should support the distressed supplier. We also find that in some cases, a nondistressed supplier may charge price premiums due to its competitor's distress, while in other cases, it may use predatory pricing to drive its competitor into bankruptcy. We complement our results with a small case study and show how our model can explain patterns observed in industry.

Should a firm, which seeks to subcontract a new product development project, leverage competition among potential suppliers and ask all of them to engage in research and development in parallel? Or should it first invite offers and commit to the supplier with the best offer, before only this supplier engages in development? Building on analytical literature on both formats, we apply game theory to answer these questions. We identify Bayesian Nash equilibrium strategies and characterize advantages of both formats. We find that having multiple suppliers engage in new product development in parallel is favored only if enough suppliers can be attracted, which is the case when development uncertainty and learning benefits are high. The participation decision also depends on the specific structure of the project's development costs. If administrative overhead and material costs are substantial, while engaging in development and exerting effort is relatively cheap but does not offer many learning opportunities, the number of suppliers who would be willing to engage in parallel development is limited. First inviting offers and selecting the best supplier to exclusively engage in new product development then becomes more attractive for the buyer. We discuss further implications and characterize environments that may foster more innovativeness in this context.