Reselling over-supplied relief goods in secondary market

The sustainable management of oversupplied relief goods is critical for minimising waste and enhancing operational efficiency in humanitarian supply chains. This study examines how aid agencies can effectively reallocate oversupplied relief goods through resale in secondary markets. Focusing on relief items that are unused, safe, but approaching expiration or removal thresholds, and thus eligible for discounted resale, we develop a loss-averse newsvendor-based model to analyse optimal allocation rules across parallel resale channels under stochastic secondary market demand. Our results indicate that the differential in the secondary-market generalised failure rate (GFR), which is a concept mathematically dual to demand elasticity, serves as the key determinant of allocation outcomes. Loss aversion further diminishes, though does not solely govern, a reseller’s competitiveness. Channels characterised by a fixed secondary-market GFR receive less favourable allocations. We also evaluate social welfare across symmetric and asymmetric channel structures, highlighting how risk preferences interact with demand characteristics. Our work extends sustainable humanitarian operations and provides actionable insights for aid agencies, resellers and policymakers on relief surplus management under uncertainty and behavioural constraints.