Optimising the configuration of food supply chains

Abstract

We study the food supply chain configuration problem (FSCCP) to optimise the tactical-level mode selection and inventory positioning decisions for a general multi-echelon food supply chain. A mixed-integer nonlinear programming (MINLP) model is developed for the FSCCP, with new building blocks to address the perishability issue in terms of both food loss and quality deterioration. Our model minimises the system-wide total supply chain costs and balances multiple supply chain performance metrics: cost, time and quality. Computational studies show that the optimal FSCCP solutions significantly outperform two heuristic solutions that focus solely on cost or quality. Additional insights are obtained on the impacts of key input parameters on the optimal configuration and performance metrics.

Keywords:

• supply chain configuration
• food supply chain
• perishability
• inventory positioning
• safety stock placement
• mixed-integer nonlinear programming

Acknowledgements

We thank the three anonymous reviewers and the AE for their helpful and constructive comments that help improve the contents and exposition of our paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The aging process of wine requires a special environment and procedure, which is not considered in this case study.