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Optimal locations of fresh produce aggregation facilities in the United States with scale economies

Houtian Ge, Stephan Goetz, Patrick Canning and Agnes Perez

International Journal of Production Economics, 2018, vol. 197, issue C, 143-157

Abstract: This article identifies through modeling the optimal locations of regional fresh produce facilities across the U.S. In contrast to much of the literature, we introduce establishment-level economies of scale to assess their impact on optimal solutions of facility locations, numbers and sizes. The facility location problem is formulated as a mixed integer linear programming model with the objective of minimizing total costs associated with fresh produce assembly, distribution facility operation. Our results suggest that the effect of scale economies is significant when large capacity facilities enjoy a comparative cost advantage. This article provides a replicable empirical framework to conduct impact and cost assessments for building and locating regional and local food system infrastructure. In addition, a number of future modeling scenarios are suggested.

Keywords: Facility location; Fresh produce value chain; Economies of scale; Cost analysis; Optimization (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:proeco:v:197:y:2018:i:c:p:143-157