Balancing Pre-Disaster Preparedness and Post-Disaster Relief for Natural Disasters and Terrorism
Challenges associated with resource allocation to mitigate and recover from the natural and man-made disasters inspire new theoretical questions for decision making in the intertwined natural and human world. This dissertation addresses the research question of what is the appropriate preparedness and relief efforts under the uncertainty of the occurrence of disasters and how to balance the trade-off between preparedness and relief considering budget limits, locations, and risk attitudes. To examine the decision making process at ex ante and ex post disaster stages, we develop a two-stage stochastic programming model that optimally distributes preparedness and relief expenditures. We use game-theoretic modeling to explore the best strategy to counter terrorism. We investigate three factors in preparedness and relief investments: budget constraints, locations and decision makers' risk preferences. We also study optimal preparedness and relief allocation strategies for all hazards and multiple-period decision-making. We analytically and numerically solve the models and provide new insights by sensitivity analysis. The results show that relief could increase in preparedness especially when the disaster magnitude and the preparedness are small, but eventually would decrease in preparedness. The preparedness and expected loss could first decrease then increase when the variance of the disaster magnitude is high. The preparedness increases in budget when the budget level is high and relief is more effective than preparedness. The relief increases in budget and decreases in disaster magnitude when disaster magnitude and budget level are relatively high. When the local preparedness and relief are highly effective the preparedness and relief from main distribution centers is not necessary and the expected loss decreases. The risk preference model shows that preparedness decreases and relief first increases then decreases when the decision maker becomes more risk seeking. The anti-terrorism model shows that the relief decreases in defense effort when defense effort increases, and first increases then decreases in attack effort when attack effort increases. The multiple-period model shows that preparedness in current period increases in discounted future effective factor of preparedness and discounted loss factor of future disasters. Relief in current period decreases in discounted loss factor of future disasters. The study of preparedness and relief in the face of disasters provides new insights for decision makers and might be beneficial to policy making of disaster related expenditures.
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