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      Designing intervention scheme for vaccine market: A bilevel programming approach

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      Author(s)
      Demirci, E. Z.
      Erkip, Nesim Kohen
      Date
      2020-06
      Source Title
      Flexible Services and Manufacturing Journal
      Print ISSN
      1936-6582
      Publisher
      Springer
      Volume
      32
      Issue
      2
      Pages
      453 - 485
      Language
      English
      Type
      Article
      Item Usage Stats
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      Abstract
      Public-interest goods benefit consumers and also generate external benefits boosting societal welfare. Despite this characteristic of these goods, their level of consumption or production are generally well below the socially desirable levels without intervention. Motivated by influenza vaccine market, this paper examines the intervention design problem for a public-interest good facing yield uncertainty in production as well as inefficiencies in distribution and allocation. The proposed mechanism considers two intervention tools with the aim of resolving the inefficiencies in the system and allowing the actors to take socially desirable decisions. The first tool is to intervene so that demand level for the good is increased; we call it demand increasing strategy. The second tool aims to support the production, allocation, and distribution by investing in research and development and better planning and enhances the availability; we call this as availability increasing strategy. The intervention design problem is based on stylized demand and availability models that take into account investments made to improve them. The model suggested is experimented by a numerical study to analyze the impact of applying proposed joint mechanism in US influenza vaccine market. The results show that proposed strategy is very effectual in terms of vaccination percentages achieved and budget savings realized beyond the current practices, and the improvement in vaccination percentages is even greater when uncertainty in the system is higher. Besides, the results suggest that as long as the parameter calibration and decision problems are solved consistently, availability can be approximated by its average value when necessary.
      Keywords
      Intervention mechanism
      OR in societal problem analysis
      Public-interest good
      Supply chain management
      Permalink
      http://hdl.handle.net/11693/53004
      Published Version (Please cite this version)
      https://dx.doi.org/10.1007/s10696-019-09348-5
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