Designing a Fresh Food Supply Chain Network: An Application of Nonlinear Programming

Abstract

In today’s business environment, many fresh food companies have complex supply networks to distribute their products. For example, agricultural products are distributed through a multiechelon supply chain which includes agricultural association, agricultural produce marketing corporations (APMCs), markets, and so forth. In this paper a fresh produce supply network model is designed to determine the optimal service area for APMCs, the replenishment cycle time of APMCs, and the freshness-keeping effort, while maximizing the total profit. The objective is to address the integrated facility location, inventory allocation, and freshness-keeping effort problems. This paper develops an algorithm to solve the nonlinear problem, provides numerical analysis to illustrate the proposed solution procedure, and discusses the effects of various system parameters on the decisions and total profits. A real case of an agricultural product supply chain in Taiwan is used to verify the model. Results of this study can serve as a reference for business managers and administrators.