Risk Mitigation in a Meat Supply Chain with Options of Redirection

David Bogataj, Domen Hudoklin, Marija Bogataj, Vlado Dimovski and Simon Colnar
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David Bogataj: School of Economics and Business, University of Ljubljana, 1000 Ljubljana, Slovenia
Domen Hudoklin: Faculty of Electrical Engineering, University of Ljubljana, 1000 Ljubljana, Slovenia
Marija Bogataj: School of Economics and Business, University of Ljubljana, 1000 Ljubljana, Slovenia
Simon Colnar: School of Economics and Business, University of Ljubljana, 1000 Ljubljana, Slovenia

Sustainability, 2020, vol. 12, issue 20, 1-23

Abstract: The aim of this paper is to present how a higher income can be achieved by developing a broader and more accurate planning framework and control perishability from stable to fork if it is possible to redirect the shipments in the case of increasing perishability dynamics or longer time delays on the roads. It also gives the answer to the question of how such a Supply Chain (SC) can be evaluated using Net Present Value (NPV) approach. The procedures include a real-time calculation and communication about the remaining shelf life (RSL) during transportation and other logistic manipulations from one chain node to another if the time to exceed the contractually stipulated Customer Remaining Shelf Life (CRSL) is distributed by known distribution. Planning and control on the skeleton of the extended material requirements planning (MRP) model are advised, where time delays and their impact on the CRSL can be easily calculated. The changes in the NPV at contractually stipulated CRSL are calculated dynamically in real-time. Smart devices, tracking temperature, humidity, and gas concentration enable such reports immediately after detecting a high probability that CRSL, as stipulated in a contract, will not be achieved, based on the known parameters of the exponential distribution of the remaining shelf life as a time to failure at each node of the graph. The model includes possibilities to deliver the meat to the local market or to the reverse logistics plants in the nodes of the remaining route, if the expected contractually stipulated CRSL becomes too high. On this way, shortening unnecessary routes further contributes to less pollution.

Keywords: perishable goods; remaining shelf life; risk mitigation; net present value (NPV); rescheduling; closed loop supply chain (CLSC) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:20:p:8690-:d:431651

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