Food supply chain coordination for growing items: A trade-off between market coverage and cost-efficiency

Nadia Pourmohammad-Zia, Behrooz Karimi and Jafar Rezaei

International Journal of Production Economics, 2021, vol. 242, issue C

Abstract: The accurate operation of a Food Supply Chain (FSC) is a critical issue as it directly interfaces with health and safety matters. This study addresses coordination and conflict management in a three-level FSC that embraces a new inventory type known as growing items like poultry and livestock. The chain involves a rearing farm as the supplier, a processed food producer as the manufacturer, and multiple processed food retailers. Vendor Managed Inventory (VMI) is applied by the manufacturer to handle the retailers' systems and prevent replenishment mismatches and thereby food waste. To increase its market coverage, the manufacturer needs to provide the retailers with enough incentives to enter this setting. So, a cost-sharing contract is designed under which the manufacturer undertakes a fraction of the retailers’ holding costs. Accordingly, the manufacturer faces two contradictory targets, increasing its market coverage by convincing the retailers to enter the system on the one hand and managing its costs efficiently on the other hand. An analytic solution approach with a game-theoretic perspective is developed to solve the model. Extensive numerical experiments and a case study are provided, presenting fruitful managerial insights that can be utilized by the policymakers and chain members under different settings. The results highlight the efficiency of our VMI and cost-sharing collaboration scheme in enhancing the performance of the chain.

Keywords: Coordination; Food supply chain; Growth; Vendor managed inventory; Market coverage; Cost-efficiency (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527321002656
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:242:y:2021:i:c:s0925527321002656

DOI: 10.1016/j.ijpe.2021.108289

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().