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Department of Information Technology, University of Turku, Joukahaisenkatu 3-5, 20014 Turku, Finland
Center for Applied Mathematics and Economics, ISEG-Technical University of Lisbon, Rua do Quelhas 6, 1200-781 Lisboa, Portugal
c
Department of Management Engineering, Technical University of Denmark, Produktionstorvet 424, 2800 Kgs. Lyngby (Copenhagen), Denmark
b
a r t i c l e in fo
abstract
Article history:
Received 28 July 2008
Accepted 13 November 2009
Available online 26 November 2009
One of the most challenging tasks in todays food industry is controlling the product quality throughout
the food supply chain. In this paper, we integrate food quality in decision-making on production and
distribution in a food supply chain. We provide a methodology to model food quality degradation in
such a way that it can be integrated in a mixed-integer linear programming model used for production
and distribution planning. The resulting model is applied in an illustrative case study, and can be used
to design and operate food distribution systems, using both food quality and cost criteria.
& 2009 Elsevier B.V. All rights reserved.
Keywords:
Supply chain management
Mixed-integer linear programming
Food industry
Quality modelling
1. Introduction
Through an integrated management of their supply chains,
companies react to increasingly competitive markets and trends
towards globalization. Supply chain management (SCM) can be
dened as the task of integrating organizational units along the
supply chain and coordinating material, information and nancial
ows in order to full (ultimate) customer demands with the
aim of improving competitiveness of a supply chain as a whole
(Stadtler and Kilger, 2008). As such, SCM should result in an
internally consistent view on how a supply chain should look like
in terms of production and distribution processes and their
coordination.
1.1. Food supply chain management
Despite the food sectors relevance, food SCM has received only
little attention in the literature. The reason may be that the
management of food supply chain networks is complicated by
specic product and process characteristics. These characteristics
have often also limited the possibilities for supply chain
integration in food supply chains (Van Donk et al., 2008). In
relation to modelling approaches, the inclusion of food-specic
characteristics is needed to be successful in this area. One of the
most essential food product characteristics to consider throughout the supply chain is product quality (e.g. Smith and Sparks,
Corresponding author. Tel.: + 45 4525 4440; fax: + 45 4525 6005.
422
Lutke
Entrup et al. (2005) and Myers (1997), product quality was
implicitly considered by constraining the shelf life of the product.
A more advanced way of including product quality can be seen in
Zhang et al. (2003), who considered a three level distribution
system with xed plant locations, potential central and distribution warehouses, as well as retailers. In their study, product
quality is represented as a function of time and temperature for
production, transportation, and storage. But their approach is still
a traditional network approach and product quality degradation is
not captured in the representation of the network explicitly. That
is, the model itself treats quality degradation as given.
423
m
X
ki ti ;
i1
and
"
q q0 exp
m
X
#
ki ti ;
i1
q q0
m
X
k0 ti expEa =RTi ;
i1
and
(zero-order and rst-order reactions), leading to linear or
exponential quality decay. For example, for food products where
quality degradation depends on microbial growth (e.g., fresh meat
and sh), the quality degradation follows the rst-order reactions
as illustrated by line B in Fig. 1, while other food products (e.g.,
fresh fruits and vegetables) follow the zero-order reactions
illustrated by line A (Labuza, 1982).
Quality prediction of food products is a complex task, due to
the range and dynamics of product characteristics and storage
conditions. Numerous models have been developed for specic
food products (e.g., McDonald and Sun, 1999; Lukasse and
Polderdijk, 2003), and some are even included in widely used
decision support software (e.g., Dalgaard et al., 2002). Regarding
the range of product characteristics, it should be noted that most
approaches are based on the fact that for a given product there is
normally one leading quality characteristic that can then be used
in quality prediction models.
Obviously, temperature is an important factor in controlling
product quality in supply chains. The rate of quality degradation k
is therefore often based on the Arrhenius equation, a formula for
the temperature dependence of a chemical reaction. The general
form of this equation is
k k0 expEa =RT
"
q q0 exp
m
X
#
k0 ti expEa =RTi ;
Storage at
production
i1
Distribution
centre
Production
Retailer
424
P2
D1
D2
...
P..
T = TS
T = T1
D1
P1
...
D1
R1
R2
...
...
D..
R..
R..
Retailers (R)
Storage
P1
sP
P1
Storage
D3
uPD
Transport
D3
sD
uDR
R2
Quality levels
qmax
Transport
425
qmin
t1
t2
(t1+sP)
t3
(t2+uPD)
t4
(t3+sD)
t5
(t4+uDR)
Period
Fig. 4. Illustration of quality degradation in a distribution network for given temperatures for storage and transportation facilities.
R
U
N
A C NN
Q
n(i)
v(i)
Parameters:
M
omax
ai,t
fi,j,k
1
gi;k
2
gi;k
pi,q,t
wi
3.4. Notation
The following notation is introduced for the purpose of
modelling:
Indices:
i
i,j
q
k
t
Sets:
P
D
dj,t
qmax
qi,min
si
Dqi,k
Dqi,j,k
ui,j
set of retailers,
set of production and storage facilities,
U= P [ D,
set of all nodes: N = P [ D [ R,
set of all arcs,
set of all quality levels q, Q={1,y,B},
set of successor nodes for node i,
set of predecessor nodes for node i.
a large positive value,
maximum planned transport lead time from
production sites to retailers
production capacity for facility i in period t,
cost for transporting one product unit per
period on arc (i, j) at temperature level k,
cooling cost for facility i per period at
temperature level k,
cost for storing one product unit for one
period in facility i at temperature level k,
cost for producing one product unit with
quality level q in facility iAP in period t,
waste disposal cost for one product unit,
which is incurred when product quality
falls below the required quality level in
facility i,
demand by retailer jAR in period t,
maximal quality level for products,
minimum quality level for products in
facility iAN,
batch size in plant iAP,
quality degradation in one period for
products stored in facility iAU at
temperature level k,
quality degradation for products transported
on arc (i,j) at temperature level k,
number of periods that transportation lasts
on arc (i,j).
Decision variables:
inventory with quality level q in facility i
Ii,q,k,t
with temperature level k at the beginning of
period t,
426
xi,j,q,k,t
zi,k,t
yi,q,t
oi,j,k,t
Oi,t
S
X
15
k1
S
X
16
17
k1
18
q Z qi;min
H
X
min
S
X
X
H
X
H
X
t 1omax k 1
H
X
1
gi;k
zi;k;t
iAU
2
gi;k
Ii;q;k;t
i A U q Z qi;min Dqi;k
wi Oi;t
t 1omax i A U
subject to
S
X
Ii;q;k;t 1
k1
S
X
k1
S
X
8t A f1omax ; . . . ; Hg;
S
X
Ii;q;k;t 1
k1
S
X
S
X
X
k 1 j A vi
k1
S
X
8t A f1omax ; . . . ; Hg;
Oi;t
S
X
qi;min X
Dqi;k 1
k1
q qi;min
S
X
X
10
11
12
k 1 j A vi q Z qi;min
19
20
21
22
23
pi;q;t si yi;q;t
t 1omax i A P q Z qi;min
q Z qj;min Dqi;j;k
8t A f1omax ; . . . ; Hg;
13
4. Illustrative case study
q Z qj;min Dqi;j;k
8t A f1omax ; . . . ; Hg;
14
Table 1
Transportation times to the retailers and their quality requirements.
Table 3
The relative cost between different temperature using 2 1C as a reference.
Temperature (1C)
Relative transportation costs (rck)
2
1
4
0.88
6
0.77
8
0.65
10
0.54
85%
R3
R4
Table 2
Estimated shelf life and quality degradation for peppers at different temperature
levels.
Temperature (1C)
Shelf life (days)
Quality degradation per day (Dq)
427
2
34
11
4
29
13
6
24
16
8
19
20
10
14
27
QL
TL
;
W
TH T L
24
4.3. Results
The model was implemented in ILOGs OPL Studio in
combination with the CPLEX 10.2 optimization software. The test
runs were performed on a 2.33 GHz Pentium 4 PC (with 1.95 GB
RAM). The network resulted in a problem instance with tens of
thousands constraints and a few ten thousand variables (around
1500 integer) and was solvable well within limits acceptable for
decision support in the industrial practice.
In our experiment, we illustrate the impact of different cooling
costs during transportation. For this purpose, we dened
fijk = a cij rck, where we varied the parameter a between 0.15
428
Table 4
Transportation temperature in degrees Celsius for shipments from the producer to the retailers in the specied periods for a =0.25 (note: not all periods require shipments
to the retailer).
To
Period
R1
R2
R3
R4
Average
2
1
10
11
12
13
14
6
4
4
4
4
4
4
2
6
4
4
2
4
2
4
2
4
2
2
4
6
2
2
2
4
4
2
4
4
4
2
4
4
4
4
2
4
2
2
4
6
2
4
2
6
2
8
4
6
2
4
4
5.00
3.29
3.43
3.00
Table 5
Transportation temperature in degrees Celsius for shipments from the producer to the retailers in the specied periods for a =0.75 (note: not all periods require shipments
to the retailer).
Period
2
1
10
11
12
13
14
10
8
10
8
8
8
10
8
8
8
10
8
8
8
8
8
8
8
10
8
10
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
10
8
8
8
10
8
8
8
10
8
8
8
Initial quality - %
94
92
90
88
86
8.71
8.00
8.57
8.00
25
10
Number of batches
R1
R2
R3
R4
Average
Temperature - C
To
20
15
10
5
0
0.2
0.4
0.6
0.8
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95
Initial product quality (%)
Fig. 6. Number of product batches for each initial product quality for scenario
a = 0.25.
Acknowledgements
The authors would like to thank the FoodDTU research centre
(www.fooddtu.dk) at the Technical University of Denmark for
partial funding of this research project. In addition, the rst
author thanks FCT (Science and Technology Foundation, Portugal)
for partial funding of this research through the program POCI
2010. Also, the second author would like to acknowledge support
from a H.C. rsted postdoctoral fellowship from the Technical
429
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