Influenza vaccine supply chain coordination under uncertain supply and demand

Influenza vaccine supply chains are subject to yield and demand uncertainty, which leads to the mismatch between supply and demand. This paper studies the production and procurement decisions in the influenza vaccine supply chain consisting of a manufacturer facing uncertain production yield and a social planner who faces uncertain demand and is responsible for social infection costs. We develop a novel model framework considering the risks resulting from uncertainties on both supply and demand sides that the manufacturer may delay part of delivery and the social planner may order under or over demand. Based on the framework, we first discuss the production and procurement decision-making problem in a centralized and a decentralized system. By comparing the two systems, we present the existence and extent of the inefficiency in the influenza vaccine supply chain. Further, we propose a procurement strategy that provides the social planner with two ordering opportunities and explore the conditions under which the two members would be willing to accept the strategy. The results show that such a strategy is effective on improving the influenza vaccine supply chain coordination. Additionally, considering large-scale outbreaks of influenza epidemics, we extend the models with a piecewise linear infection probability function to those with a generic one and describe the characteristics of the extended models and their solutions.