Retail food supply chain restructuring and product waste : an optimisation approach for minimising costs in three- and four-stage retail food supply chains

Abstract

In this thesis, mixed-integer linear programming models for optimising product distribution in three- and a four-stage retail food supply chains (SC) are formulated, and use of the models are exemplified in a case study with large amounts of data. The four-stage supply chain model is comprised of production plants, warehouses, cross docking facilities, and retail stores. The three-stage supply chain model excludes the cross docking facilities, but includes a stricter division of shelf life between the supply chain actors. The models minimise total cost by making decisions on production volumes, inventory levels and shipped product volumes. A product quality measure is explicitly integrated in the models as an index on product volumes. In the case study, historical data from a large, Norwegian meat-processing corporation is used to run the models in order to capture differences in costs incurred in the two supply chain structures. Data for four products with varying demand patterns, degree of demand uncertainty and shelf life lengths are run. The results show that lack of information sharing within the supply chain will increase waste for all products, and that shorter shelf life has a greater impact on waste volumes than that of uncertainty in demand.