Option contracts in fresh produce supply chain with circulation loss

Purpose: The purpose of this paper is to investigate management decisions via option contracts in a two-stage supply chain in which a fresh produce supplier sells to a retailer, considering the circulation loss of the fresh produce. Design/methodology/approach: Authors propose a Stackelberg model to analyze the supply chain members’ decisions in the decentralized supply chain compared with the integrated one under the newsvendor framework. Findings: The results illustrate that there exists a unique optimal option order quantity for the retailer and a unique optimal option order price for the supplier giving certain conditions; furthermore, option contracts cannot coordinate the fresh produce supply chain when the retailer only orders options. Originality/value: Agricultural products especially fresh produce’s characteristics such as circulation loss and high risk are considered. Option contracts and game theory are combined to manage the fresh produce supply chain’s risk. The proposed tool and models are hoped to shed light to the future works in the field of supply chain risk managementPeer Reviewe

Quality and Operations Management in Food Supply Chains: A Literature Review

We present a literature review on quality and operations management problems in food supply chains. In food industry, the quality of the food products declines over time and should be addressed in the supply chain operations management. Managing food supply chains with operations management methods not only generates economic benefit, but also contributes to environmental and social benefits. The literature on this topic has been burgeoning in the past few years. Since 2005, more than 100 articles have been published on this topic in major operations research and management science journals. In this literature review, we concentrate on the quantitative models in this research field and classify the related articles into four categories, that is, storage problems, distribution problems, marketing problems, and food traceability and safety problems. We hope that this review serves as a reference for interested researchers and a starting point for those who wish to explore it further

Dynamic Pricing for Managing Product Selling on Fruit Supply Chain Management

Recently fresh fruit sector is grown not only due to increasing of demand that spirited by healthy lifestyle but also requirement of quality food should be eaten daily. Its complexity make many research considered fruit in certain supply chain, called as Fruit Supply Chain (FSC). In FSC, customers tend to purchase products with a longer remaining lifetime and avoid the ones which give aging signal. Customer willingness to pay decreases once the product start to be deteriorated, which may cause slower demand for aging fruits. Consequently, retailers should enable discounted price for aging fruits products to retain or improve demand rate. Hence, a solution of this is creating price that dynamically following the condition of goods. This research establishes pricing scheme, which is dynamic pricing to FSC. Main purpose of this research is explaining how to maximize supply chain profit by applying dynamic pricing. Remind that there is deterioration that does exist on FSC product and its customer preferences, dynamic pricing will be close to the real life particularly applied by FSC players. A set of mathematical model is optimized on this research. It addresses dynamic pricing for FSC players to achieve better profitability. The result proves that dynamic pricing is urgent to be done. In order to avoid unsold product due to became deteriorated, FSC players can separate selling period into three periods, which are forward buying period, normal price period, and markdown price period. Moreover, there are several parameters involved on optimization has different impact on FSC profitability, where it should be thoroughly focused on by FSC players collaboratively

Innovative Logistics Management under Uncertainty using Markov Model

This paper proposes an innovative uncertainty management using a stochastic model to formulate logistics network starting from order processing, purchasing, inventory management, transportation, and reverse logistics activities. As this activity chain fits well with Markov process, we exploit the very principle to represent not only the transition among various activities, but also the inherent uncertainty that has plagued logistics activities across the board. The logistics network model is thus designed to support logistics management by retrieving and analyzing logistics performance in a timely and cost effective manner. The application of information technology entails this network to become a Markovian information model that is stochastically predictable and flexibly manageable. A case study is presented to highlight the significance of the model. Keywords: Logistics network; Markov process; Risk management; Uncertainty management

Modelling and Determining Inventory Decisions for Improved Sustainability in Perishable Food Supply Chains

Since the introduction of sustainable development, industries have witnessed significant sustainability challenges. Literature shows that the food industry is concerned about its need for efficient and effective management practices in dealing with perishability and the requirements for conditioned storage and transport of food products that effect the environment. Hence, the environmental part of sustainability demonstrates its significance in this industrial sector. Despite this, there has been little research into environmentally sustainable inventory management of deteriorating items. This thesis presents mathematical modelling based research for production inventory systems in perishable food supply chains. In this study, multi-objective mixed-integer linear programming models are developed to determine economically and environmentally optimal production and inventory decisions for a two-echelon supply chain. The supply chain consists of single sourcing suppliers for raw materials and a producer who operates under a make-to-stock or make-to-order strategy. The demand facing the producer is non-stationary stochastic in nature and has requirements in terms of service level and the remaining shelf life of the marketed products. Using data from the literature, numerical examples are given in order to test and analyse these models. The computational experiments show that operational adjustments in cases where emission and cost parameters were not strongly correlated with supply chain collaboration (where suppliers and a producer operate under centralised control), emissions are effectively reduced without a significant increase in cost. The findings show that assigning a high disposal cost, limit or high weight of importance to perished goods leads to appropriate reduction of expected waste in the supply chain with no major cost increase. The research has made contributions to the literature on sustainable production and inventory management; providing formal models that can be used as an aid to understanding and as a tool for planning and improving sustainable production and inventory control in supply chains involving deteriorating items, in particular with perishable food supply chains.the Ministry of Science and Technology, the Royal Thai Government

Agribusiness supply chain risk management: A review of quantitative decision models

Supply chain risk management is a large and growing field of research. However, within this field, mathematical models for agricultural products have received relatively little attention. This is somewhat surprising as risk management is even more important for agricultural supply chains due to challenges associated with seasonality, supply spikes, long supply lead-times, and perishability. This paper carries out a thorough review of the relatively limited literature on quantitative risk management models for agricultural supply chains. Specifically, we identify robustness and resilience as two key techniques for managing risk. Since these terms are not used consistently in the literature, we propose clear definitions and metrics for these terms; we then use these definitions to classify the agricultural supply chain risk management literature. Implications are given for both practice and future research on agricultural supply chain risk management

Asymmetric Information Mitigation in Supply Chain: A Systematic Literature Review

With the level of competition and consumer demand is changing rapidly, the speed and accuracy of the information flow in the supply chain increasingly necessary. Sharing of information between the parties in a supply chain plays an important role in improving the sustainability of a business, but imperfection information is inevitable because each party in the supply chain has a different objective. This condition increases the importance of a research on the mitigation of asymmetric information in the supply chain, therefore the purpose of this study was to conduct a review of previous studies related to overcoming the asymmetric information and map research trend on mitigating asymmetric information in the supply chain. We used systematic literature review (SLR) methods to analyze the data collected from Web of Science and Scopus database from 2005 to 2016. The results of this study can be used as a guide and a reference for further research related to overcoming the asymmetry of information in the supply chain in every industrial sector

Resilient and Sustainable Supply Chain Networks: A Case Study of the Perishable Food Industry in the US

Contemporary supply chain management (SCM) issues are multiplex and continually evolving catalysed by complexities and dynamism. The perishable food industry exemplifies this phenomenon, driven by globalisation, technological advancements and a highly competitive business environment. Inescapably, food supply chains are increasingly operating as supply chain networks (SCN). SCNs are typified by a higher level of interdependence and connectivity amongst firms, consequently evolving from dyad and triad relationships, which have dominated SCM research. These changes generate divergent risks and vulnerabilities that perturb perishable food supply chains in unconventional ways. Thus, the purpose of this empirical study is to investigate how firms within a perishable food supply chain network can build resilience and sustainability. The research focuses on advancing the management of fast-moving consumer goods (FMCG). Methodologically, an empirical qualitative study is undertaken within a food manufacturer (focal firm) and 18 independent firms operating across all tiers of its SCN. Applying a pragmatic philosophical positioning, the study draws concepts from key supply chain theories to investigate the phenomena. The investigation uses Nicolini’s Zooming in and Zooming out as an analytical lens. The zooming in and out is established by shifting analytical lenses and re-positioning actors’ praxis, to ensure certain facets of their actions are fore-grounded while others are put in a background position and contrariwise moving the background to the foreground. The purpose of this technique is to draw meaning from everyday practices and trace the actions of actors across the entire SCN. The results uncover four distinct but intertwined main categories; whose subtle and often ignored interplay is crucial in attaining SCN resilience and sustainability. These main categories are Collaboration, Power Dynamics, SCN Culture and Information Systems. Current supply chain literature argues that collaboration is an essential enabler of resilience and sustainability. Building on this, the findings make a significant contribution by teasing out the intangible and predominately unacknowledged antecedents and salient sustaining factors of effective SCN collaboration. Furthermore, the study develops a resilience and sustainability (RS) matrix, which renders different impacts and outcomes of varying levels of SCN collaboration between firms operating in a perishable food SCN. Therefore, this thesis contributes knowledge towards constructing resilient and sustainable perishable food SCNs by proffering pragmatic propositions. These aim to address challenges facing industry stakeholders and ignite pertinent future research avenues for scholars