Quality and Operations Management in Food Supply Chains

In this subsection, we discuss the transportation planning in food supply chains considering food quality degradation. In economy, transportation plays an important role, which accounts for two-thirds of the total logistics cost and affects the level of customer service. In reality, food supply chains stretch from upstream agricultural farms to downstream consumers, with intermediate manufacturers, foodservice providers, and sellers in the middle. Along the distribution process, food products may perish and temperature control becomes crucial for supply chain partners to reduce wastes and enhance food quality and food safety. To enhance the profitability and competitiveness, many enterprises strive to handle the issue of product perishability so as to maintain the value of their products.

The transportation planning problems are mainly concerned with the optimization of delivery routes, delivery quantities, and delivery time. Transportation modes, such as flights, cargo vessels, or trains, should also be considered. Although great progress has been made in this direction in terms of considering product perishability properties, challenges still exist.

Transportation planning mainly deals with vehicle routing problems (VRP). When considering product perishability, more factors should be reconsidered in this research area. First, food safety is a main concern when enterprises distribute the food products from manufacturer to retailers and customers. For example, Rijgersberg et al. developed a simulation model of the distribution chain of fresh-cut iceberg lettuce under the consideration of quality and safety during distribution stage. Second, different types of perishable products should be stored in different conditions during transportation. Because the storage temperatures for chilled meat and fresh vegetable are different, a vehicle may be divided up into multiple compartments with different temperature controls. This makes the transportation planning more complex and more challenging. Third, distribution planning of the food products is often linked to customers' preferences and satisfactions. In real life, the fresher the products, the higher the price. Shorter delivery time helps to maintain the freshness, yet it increases the total transportation cost.

Transportation Planning Considering Various Factors

During the transportation of perishable products, factors like the product quality, the product safety, the transportation mode, the preservation conditions, or multifirms' coordination all have significant impacts on optimal decisions.

Dabbene et al. assumed that quality of the perishable products during transportation is directly linked to time and solved a distribution planning model by a heuristic approach. Quality change may lead to food safety problems. Rijgersberg et al. also developed a simulation model of the distribution chain of fresh-cut iceberg lettuce under the consideration of quality and safety during distribution stage. The main purpose was to study the impacts of product life cycle, customer purchasing behaviors, and distribution lead time reduction on distribution strategies.

Some researchers demonstrate that transportation modes affect the optimal decisions significantly. Ahumada and Villalobos considered transportation modes in their integrated production and distribution optimization models. They proposed that supply chain partners need to choose from the transportation modes of truck, rail, or air to distribute their packaged perishable products under different conditions. The impacts of refrigeration cost were discussed in Dabbene et al. Rong and Grunow studied the impacts of product dispersion during distribution on optimal distribution planning strategies. Although dispersion enhances supply chain efficiency, it also causes food safety problems. Their approach allowed decision-makers to deal with the tradeoff under different risk attitudes. Cai and Zhou studied the optimal production and delivery policies when facing two markets (i.e., local market and foreign market) and the transportation to foreign market may be disrupted. An optimal policy was proposed to minimize the total cost. Eleonora and Jesus analyzed the schemes for food delivery to urban food sellers. They studied the impacts of traffic regulations, delivery services, and an urban distribution center on the distribution efficiency in a case study of Parma, Italy. Ketzenberg and Ferguson studied the value of information sharing between the seller and the supplier in a two-level supply chain. They showed in the numerical tests that information sharing not only improves profits of the two parties, but also benefits customers by enhancing product freshness.

In addition to the impacts of quality, safety, and transportation modes, Grillo et al. proposed a mixed integer mathematical programming model to study an order promising process in fruit supply chains with subtypes of products considering various natural factors, such as land, weather, or harvesting time. Bilgen and Günther studied an integrated problem for production and distribution planning. They considered two different transportation modes in the distribution stage between plants and distribution centers: the full truck load and less than truck load.

Soysal et al. studied a routing problem with multiple suppliers and customers considering food perishability and horizontal collaboration between supply chain partners. They found that horizontal collaboration may reduce wastes and carbon emission and increase distribution efficiency of the whole supply chain. They used an experiment to study the impacts of related factors and found that the gains are highly sensitive to the supplier size or the maximum shelf life of the products.

Transportation Combined with Inventory Problems

It is common that transportation planning is often related to inventory planning problems. The combined inventory-routing approaches not only solve the short term VRP problems, but also help to overcome the long term production planning problems.

Rong et al. studied a joint production and distribution planning model under the consideration of food quality degradation. In addition to routing and storage planning decisions, the firm also makes decisions on the temperature during storage and distribution. The problem was solved with a generic approach. Farahani et al. studied an integrated production and distribution planning model for a kind of fast perishable food product. To deal with the fast perishability, they proposed a policy to shorten the time interval between production and distribution. Adelman and Mersereau studied a dynamic capacity allocation problem when customers' ordering quantity is correlated to fill rates in the past. In their model, customers risk attitudes to the fill rates were different. Given customers' differentiated behaviors, a dynamic rationing policy of the fill rates was proposed to achieve higher profit and higher customer satisfaction.

Coelho and Laporte studied an integrated replenishment, distribution, and inventory management problem when products have various lifetimes. They showed in the numerical experiments that the optimal policy is either to sell the oldest available items first to avoid spoilage, or to sell the fresher items first to increase revenue. Devapriya et al. studied an integrated production and distribution scheduling problem for perishable products in a multiechelon chain. Their objective was to determine the optimal fleet size and trucks' routes in order to minimize the aggregated cost. Unlike the previous research, their study captured both production and distribution planning under the consideration of limited lifetime of the products. A mixed integer programming model was formulated to solve the problem and heuristics based on evolutionary algorithms were provided to resolve the models. Liu et al. studied the dynamic inventory rationing problem for perishable products over multiple periods for a wholesaler. The rationing strategy was not only determined by the perishable properties of the products but also affected by the uncertain selling price in the future periods. Qiu et al. studied a generalized production-inventory-routing problem for perishable products. They have discussed several inventory management policies to illustrate the real-world applications of the proposed models.

More works can be seen in Bilgen and Günther, Makkar et al., Cai et al., Rahdar and Nookabadi, Uthayakumar and Priyan, Jia et al. Diabat et al., Lee and Kim, Gaggero and Tonelli, Belo-Filho et al., Priyan and Uthayakumar, Seyedhosseini and Ghoreyshi, Sel et al., Mirzaei and Seifi, Drezner and Scott, and Dobhan and Oberlaender.

Transportation Combined with Network Design Problems

In food industry, there exist many kinds of distribution networks. In practice, the network design problem is to jointly optimize the location of hubs and the flows from upstream manufacturers to downstream retailers and customers. Distribution network design plays a key role in reducing transportation costs and maintaining quality of perishable products in food supply chains. However, many of the existing models on distribution network design only consider single period problems, which cannot be used to solve the problems for perishable products with time limitations within the networks. To solve the network design problems, many new types of mathematical models and innovative algorithms were developed in the last decade.

Firoozi et al. studied a network design problem for perishable products which have limited storage time during transportation. Their model attempted to balance the benefit from enhancing storage conditions to maintain products quality and the associated costs to improve storage conditions. An efficient Lagrangian relaxation heuristic algorithm was developed to solve the proposed model. Firoozi et al. studied a similar network design problem considering product perishability. They proposed a memetic algorithm (MA) and proved that it works more efficiently than the Lagrangian relaxation heuristic algorithm. Unlike Firoozi et al. and Firoozi et al., Firoozi and Ariafar considered a fluctuated expected lifetime of perishable products during transportation due to unusual weather condition or malfunction of transportation and storage facilities.

Drezner and Scott studied an inventory and location decisions in a network with a single distributor and multiple sales outlets for perishable products. Computational experiments showed that the location of the distribution center affects the inventory decisions significantly. Tsao considered the joint location, inventory, and preservation decisions for a two-level supply chain with a supplier, a wholesaler, and multiple distribution centres. Algorithms were proposed to solve the nonlinear optimization models. Dulebenets et al. studied an intermodal freight network design problem which deals with the decisions of production, inventory, and transportation. The numerical cases show that decaying cost significantly affects the transportation modes and the associated distribution routing. Rashidi et al. formulated a biobjective mathematical model to optimize the joint location-inventory decisions in a network for perishable products. A Pareto-based metaheuristic approach was proposed to solve the models. de Keizer et al. studied the network design problems for perishable products under different product quality and delivery lead time. The objective was to study the impacts of quality decay and its heterogeneity on optimal network design strategies. They used a mixed integer programming approach to formulate the model, which is to maximize the total profit under quality constraints. The results showed that heterogeneous product quality decay has significant impacts on network design and profitability.

Summary

In this subsection, the papers on food products transportation problems are reviewed. In this area, people often study the transportation problems with various factors including product quality, product safety, transportation mode, preservation conditions, and multifirms' coordination. In addition, in real practice, transportation planning is often combined with inventory planning or network design or both. As such, we presented a comprehensive review of papers studying joint decisions of inventory-transportation problems and network design-transportation problems.