Discussing the parameters of preservation of perishable goods in a cold logistic chain model

Abstract

The paper discusses the parameters of preservation of perishable goods in cold logistic chains. The key parameters are the intensity of deterioration of goods, the conservation effect of perishable goods and the delay of activation of the conservation effect. The values of these parameters determine the quantity of the product being deteriorated in the logistic chain and the extent to which the deterioration can be alleviated. Econometric estimation thus presents the quantity effects of preservation procedures, whereas the financial effects can be derived using the proper price categories in the calculation of the net present value or the annuity stream. In this way one can determine whether the implementation of preservation procedures is more rational than the purchase of an attainable insurance policy.

Notes

¹ The final demand is exogenous in the presented (cold) logistic chain model of perishable goods.

² State of the system presented herein belongs to the state space of continuous functions (cf. Hale, 1977).

³ The delay of activation of the conservation effect τ_k can be understood as an instrumental variable to vary the values of the remaining two parameters, i.e. the degree of intensity of deterioration of perishable goods q_k and the degree of conservation of perishable goods r_k at stage k.

⁴ In the subsequent numerical example several stages of activity in the supply chain were combined due to simplification to obtain three stages only. We believe that this is sufficient to demonstrate the econometric estimation of preservation parameters for perishable goods in cold logistic chains.

⁵ A single deteriorated product ‘PP’ automatically indicates that the box with such a product is unserviceable regardless of the number of the good products remaining in the box and is as such separated and discarded at the expense of company ‘X’.

⁶ The regression equations of the system of Equations 15 do not contain constant terms, since we assume that all relevant regressors of the dependent variable are included. Such a specification is also in accordance with the nature of difference Equations 12 and 14.