Improving social welfare chain using optimal planning model

Purpose – The purpose of this study is to introduce the concept of social welfare chain and address the challenges in decision making through the development of an optimal planning model for a nongovernmental organization (NGO). The distinctive properties of the social welfare chain and its relationship with the humanitarian relief chain in the context of supply chain management are also discussed. The paper presents a real decision problem and analyzes the managerial impacts of the proposed solution. Design/methodology/approach – The study of social welfare policy and the review of the humanitarian literature has necessitated the introduction of the social welfare chain. Based on its definition, an optimal facility location distribution model that consolidates the non‐integrated style of logistics functions with a cost minimizing approach is developed. The General Algebraic Modeling System (GAMS) is used in order to optimize the coal distribution model of an NGO. Data is obtained from an NGO that aims to help vulnerable people through distributing coal and basic food such as rice and sugar. Findings – Besides laying the foundations of social welfare chain, an analytical tool for decision support systems of the NGOs can be considered as the major finding of the research. Despite the increased number of stages in the proposed network configuration, the optimal solution resulted in significant cost reduction and distribution efficiency due to the availability of temporary distribution center locations at no extra cost. Furthermore, this study brings out the advantages of using intermodal transportation in the distribution process of cost‐sensitive networks. Practical implications – This paper provides a detailed analysis that contributes to the efficiency and the effectiveness of social welfare chains. Moreover, it represents a cooperation established between university and NGOs. Originality/value – The planning efforts of nongovernmental organizations targeting at the periodical aids to improve the social welfare level have received little attention in the literature. This paper is the first to propose the concept of “Social Welfare Chain”, at the same time addressing the distribution planning for the NGO.