Perishable Product's Supply Chain Coordination with Option Contract Under Two Production and Ordering Modes

Blood service operations are a key component of the healthcare system all over the world and yet the modeling and analysis of such systems from a supply chain network optimization perspective has been lacking due to their associated unique challenges. In this paper, we develop a network optimization model for the complex supply chain of human blood, which is a life-saving, perishable product. In particular, we consider a regionalized blood banking system consisting of collection sites, testing and processing facilities, storage facilities, distribution centers, as well as points of demand, which, typically, include hospitals. Our multicriteria system-optimization approach on generalized networks with arc multipliers captures many of the critical issues associated with blood supply chains such as the determination of the optimal allocations, and the induced supply-side risk, as well as the induced cost of discarding the waste, while satisfying the uncertain demands as closely as possible. The framework that we present is also applicable, with appropriate modifications, to the optimization of other supply chains of perishable products.

The role of sustainability in the function of a company and more specifically a food company is pivotal for its financial performance. The environmental issues as well as the potential economic gains from the implementation of its principles ask for the use of multiple instruments that have been developed to green supply chains. Moreover, social issues also arise and involve the food companies social responsibility, as this can be realized through the supply of fresh products that meet consumption security standards. On this basis, the strategic design of these companies’ supply chains can assists them towards meeting their sustainability objectives as it may lead to the selection of transportation modes, location of entry points and distribution centers, and flows between the nodes of the networks under cost, environmental and social impact minimization criteria. Under this context the purpose of this manuscript is to develop and employ a multi-objective (namely cost, social-time and emission minimization) mixed integer linear programming decision-making model for the network design of sustainable supply chains of perishable food products. The specific model was implemented in the case of a fruits importer in the North-Eastern European region considering its geographical settings. To synopsize and according to our findings the suggested model is an easy to use decision-making tool that leads to a whole set of possible solutions incorporating trade-offs between three aspects of sustainability.

Prices at different levels of the supply chain are linked through long-run relationships and tend to differ by the marketing costs. However, several aspects intervene in making price dynamics along the supply chain quite complicated and erratic. In particular, several issues on how marketing margins evolve over time and across commodities, as well as how prices are transmitted along the supply chain are still debated. The implications for the understanding of the economy, the management of the firms, and the regulations of the markets are important and pushed scholars to dedicate particular attention to these topics. In particular, how prices evolve in the supply chain of perishable products is an intriguing challenge that has stimulated a hot debate. We review the literature on price analyses, marketing margins, and vertical price transmission with particular emphasis on perishable products (fruits and vegetables) in order to conclude on the open issues worth further investigation.

In recent decades, changes in people’s lifestyles and occupations have led to new food consumption patterns around the world, with a notable growth in the demand for ready meals and meat products. Accordingly, the food industry has tried to transform the global food culture by promoting its more profitable products to become able to set a higher price for meat. Considering the short lifetime of products in perishable food supply chains, inventory decisions are considered crucial. In addition, the demand for perishable food products is greatly affected by their freshness. In this paper, we develop a multi-objective mixed-integer non-linear programming model for a four-level sustainable supply chain (SC) of a perishable product with price-dependent demand and deterioration rates. The SC consists of suppliers, a production center (PC), distribution centers (DCs), and retailers. We aim to ascertain the optimal pricing policy and cycle length to maximize profit, achieve specific social objectives, and minimize the total cost and adverse environmental impacts. The proposed model determines the deterioration rate of each product according to its expiration date, the optimal location of supply-side facilities, and the flow rate between the facilities based on the selected mode of delivery. The products are delivered to the retailers by a mechanized transportation system either directly from the PC or indirectly through the DCs. Finally, an actual case study is provided to demonstrate the applicability of the model and our theoretical results under real-world conditions. We solve the case study by a preemptive fuzzy goal programming method and perform several sensitivity analyses on the results. By performing simultaneous sensitivity analyses on the demand and expiration dates, the optimal values of the problem’s parameters are determined. The optimal values help decision-makers make optimal decisions regarding the selling price of products and replenishment times. The model is applicable to supply chains of any perishable items with expiration dates.

Optimizing the supply chain of agricultural products is an important way to revitalize the rural economy. The perishable products are agricultural products with special properties and great potential. Game theory is an effective research tool for maximizing revenue management in competition and cooperation. Therefore, this study reviews the literature on the pricing and procurement of perishable products in the past three years under the game theory. Firstly, this study summarizes the common game models of supply chain through the review of multi-objective models. Secondly, it summarizes the literature on pricing and purchasing, and explores the strategies of product management, benefit maximization and supply chain coordination. Finally, based on some cutting-edge results, this study proposes promising research directions in the future. This study is helpful to summarize the application of game theory in supply chain management, help rural agricultural products to achieve maximum benefit, and solve the problem of supply and demand optimization.

The digital transformation of supply chains has become increasingly significant, particularly in the context of perishable agricultural products. These goods are time-sensitive and highly vulnerable to post-harvest losses, making efficient supply chain management crucial. This study explores the key factors that determine the adoption and implementation of digital technologies such as blockchain, IoT, AI, and cloud computing within the supply chains of perishable agricultural commodities. While digital tools offer potential to enhance transparency, reduce wastage, and improve coordination among stakeholders, the actual implementation remains uneven, especially in developing regions. This research investigates the technological, organizational, and environmental determinants influencing digital transformation by employing the Technology-Organization-Environment framework and the Resource-Based View. It further examines the roles and perspectives of various stakeholders, including farmers, distributors, logistics providers, and retailers, in adopting digital innovations. The study highlights both enablers and barriers such as infrastructure readiness, investment capability, stakeholder collaboration, and policy environment. Through this analysis, the research seeks to provide a comprehensive understanding of the dynamics shaping digital transformation in the perishable agricultural sector. The findings aim to guide policymakers, agribusiness leaders, and technology developers in designing strategies that facilitate sustainable and inclusive digital adoption, ensuring enhanced food security, traceability, and economic efficiency. The study focuses on supply chains dealing with fruits, vegetables, dairy, and flowers, and acknowledges limitations related to regional diversity and access to digital infrastructure.

PurposeThe purpose of this paper is to contribute to the understanding of the relationship between information sharing and performance of perishable product supply chains (PPSC). Building on transaction cost economics (TCE), organisational information processing theory (OIPT), and contingency theory (CT), this study proposes a theoretical framework to guide future research into information sharing in perishable product supply chains (IS-PPSC).Design/methodology/approachUsing the systematic literature review methodology, 48 peer-reviewed articles are carefully selected, mapped, and assessed. Template analysis is performed to unravel the relationship mechanisms between information sharing and PPSC performance.FindingsThe authors find that the relationship between information sharing and PPSC performance is currently unclear, and there is inconsistency in the positioning of information sharing among constructs and variables in the IS-PPSC literature. This implies a requirement to refine the relationship between information sharing and PPSC performance. The review also revealed that the role of perishable product characteristics has largely been ignored in existing research.Originality/valueThis study applies relevant multiple theoretical perspectives to overcome the ambiguity of the IS-PPSC literature and contributes nine propositions to guide future research. Accordingly, this study contributes to the refined roles of relationship uncertainty, environmental uncertainty, information sharing capabilities, and perishable product characteristics in shaping the relationship between information sharing and PPSC performance.

Accepted by: M. Zied BABAI In recent years, global disruptions, such as the COVID-19 pandemic, have significantly exposed vulnerabilities in supply chains, particularly in the handling of perishable goods. Addressing these vulnerabilities, this study focuses on assessing risks in perishable supply chains by employing a novel decision-making approach that integrates the outranking method with a visualization technique. This study makes a methodological contribution to scholarly work by integrating VIseKriterijumska Optimizacija I Kompromisno Resenje, which provides the best compromise ranking, with Graphical Analysis for Interactive Assistance, which enhances clarity through detailed visual representation. The integration is further reinforced by a sensitivity analysis, ensuring robust and reliable findings. From a practical perspective, this study evaluates the supply chain performance of nine perishable items based on eight critical risks. The outcomes provide insights into the risk intensity of supply chains disruptions for each perishable product, facilitating the development of effective management policies. These findings offer valuable managerial insights, equipping researchers and practitioners with essential tool to formulate effective strategies and enhance decision-making processes during undesirable circumstances.

Supply chain network design problem is increasingly showing its importance, especially the perishable supply chain. This research develops a multi-objective mathematical model to design four-echelon intermodal multi-product perishable supply chain configuration in order to ensure a balance of the three pillars of sustainable development: economy, environment, and society. The optimization objective functions of the model are, respectively, minimizing costs, delivery time, emissions, and the supply-demand mismatch in time. The model addresses particular problems in the supply chain of fresh fruits, which is more challenging compared to other types of perishable products due to its seasonal characteristics. The study proposes a new approach that combines and standardizes the above objective functions into a single weighted objective function. The solution from the model supports the decision-making process at both strategic and tactical levels. Strategically, the model supports decisions about the location, size of facilities, product flows, and workforce level. Tactically, the decision variables provide information on harvest time, delivery time, the delivery route, and mode of transport. To demonstrate its practical applicability, the model is applied to Mekong Delta region, Vietnam, where a variety of fruit types, large yields, and high distribution demand in this region make designing a shared supply chain desirable for its overall economic, environmental, and social concerns. Moreover, sensitivity analysis regarding weights of different objectives is performed to assess possible changes in supply chain configurations. Application of this model to other perishable products, the addition of modes of transport, social policy, and uncertainty parameters may be suggested for future research.

Improving the efficiency in the links in the supply chains of agri-food products is relevant in terms of the assessment methodology and practical aspects for ensuring and supporting sustainable supply chains of products not only in individual channels of product movement but also in the end-to-end supply chain of products, i.e., from the field to the end consumer. However, it is still unclear which supply chain opportunities in commodity distribution channels are more effective for creating end-to-end sustainable supply chains for agri-food products. The purpose of the study is to develop a methodology for assessing the impact of agri-food supply channels on the efficiency and link in supply chains, taking into account the factors affecting them and developing recommendations for their improvement. Quantitative methods based on correlation and regression analysis using the EViews program on the basis of Kazakh statistical data for 2008–2022 were used. A methodology is proposed for assessing the effectiveness of the functioning and links in commodity movement in the supply chains of agricultural products at the macroeconomic level based on the consideration and use of important factors affecting the efficiency and links: production and sales volumes, total costs, and profitability for each supply channel: “production–processing–industrial production–trade”. The relationship between the efficiency and the links in supply chains and also the key factors that affect them have been established. The results showed that the increase in the efficiency in supply channels in the commodity distribution system leads to a decrease in the coefficient of the link in commodity movement and inventory availability. To reduce the link ratio in the supply chains of agri-food products, it is necessary to increase the efficiency in supply chains in each supply chain link and reduce the share of retail trade in the gross turnover. Recommendations are proposed to improve supply chain efficiency and reduce links to support and create end-to-end sustainable supply chains of agri-food products. The study makes an essential contribution to providing empirical evidence of the relationship between the effectiveness of agri-food supply channels and the link in the supply chain. Since few works describe the relationship between the links of product distribution and the efficiency in supply chains in the literature, in this work, it was possible to propose a methodology and identify factors and gaps in research to identify potential areas for future research.

Order variability in perishable product supply chains

The purpose of this paper is to discuss how cross-border e-commerce enterprises can promote the sustainable development of the supply chain by optimizing the risk of supply disruption and product quality control mechanism of the cross-border supply chain of low-carbon agricultural products in the face of the problem of uneven quality and inventory shortage that prevails in the supply chain of low-carbon agricultural products under the framework of low-carbon economy. Methods: A two-level supply chain model consisting of a risk-averse cross-border e-commerce enterprise and two risk-neutral overseas suppliers is constructed to compare the optimal strategies and their coordination effects under the centralized and decentralized decision-making modes, and to deeply analyze the supply chain's operation mechanism. Further, the quality cost factor is introduced and an option contract model is designed to quantitatively analyze the impact of different decision-making scenarios and parameter changes on the overall supply chain performance. The results of the study show that under the coordination of option contract, the profit of cross-border e-commerce companies tends to decrease as the risk of supply disruption increases, while the profit of suppliers rises accordingly. Meanwhile, improving the quality of agricultural products can significantly improve the overall profitability of the supply chain. The cost-sharing mechanism is positively related to the profit of cross-border e-commerce companies, but negatively affects the profit of suppliers. In addition, the adjustment of the option price is directly associated with the increase of the specific supplier's profit and the decrease of the cross-border e-commerce enterprise's profit. Conclusion: By constructing and analyzing the option contract model considering the risk of supply disruption, this study effectively reveals the key influencing factors and their interactions in the cross-border supply chain of low-carbon agricultural products, and provides cross-border e-commerce enterprises with specific strategies to achieve coordination of the supply chain contract, improve product quality, and mitigate the risk of supply disruption, and then promote the sustainable development of the supply chain of low-carbon agricultural products.

Context: The problem of locating facilities in supply chains of perishable agricultural products has not been widely addressed, however, this issue in recent years has taken great interest because of concerns about the consumption of fresh and healthy food, important aspect in countries with fruits food producer potential. Method: A systematic review of the state of the art on facility location problems for perishable agricultural products was conducted. The following databases were searched: Science Direct, IEEE Xplore, SpringerLink, JSTOR, Scopus and Google Scholar. From an initial collection of 135 papers obtained with a generic search query for food location, 31 were finally selected for review focusing on food supply chain location model, within a publication date ranging from 2004 to 2015. Results: Based on the review, a typology of variables considered and not considered in models pertinent to conditions relevant to countries such as Colombia, is proposed. Objective functions commonly used, specific restrictions for Food Supply Chain (FSC) and logistical drivers most commonly considered in these models were also identified. Future research, regarding variables to be included in FSC models location for perishables in context of mountainous countries were identified.Conclusions: Strategic decisions such as the location of facilities are of great importance for the design of the fresh food supply chain and its network, given the perishability. However, the issue has been poorly evaluated especially due to the difficulty of modeling and the large number of variables to consider in this type of chain. Models that include the perishability, losses and stochastic behavior of some variables are required. Colombia can benefit from more research in location models of perishable food, particularly the impact on perishability due to its particular conditions of great variety of climates, mountainous landscapes along with a limited transport and road infrastructure.

This paper considers a fresh products supply chain consisting of a supplier, distributor and a retailer. we use CVaR risk measurement tool to build the supply chain model of three-level of fresh products which the retailer under the risk aversion, preference, respectively. At the same time, the loss of fresh products with time is considered and the option contract is applied to the supply chain model. Therefore, the supply chain coordination is realized by adjusting the option contract parameters. The conclusion implies that the purchase price of the option is not affected by the loss value but the execution price of the option is affected by the loss value. In addition, the attitude of aversion and preference about the retailer will not affect the execution price of the option and only affect the purchase price of the option of the distributor and retailer.

Purpose– The purpose of this paper is to assess whether an existing sourcing strategy can effectively supply products of appropriate quality with acceptable levels of product waste if applied to an international perishable product supply chain. The authors also analyse whether the effectiveness of this sourcing strategy can be improved by including costs for expected shelf life losses while generating order policies.Design/methodology/approach– The performance of sourcing strategies is examined in a prototype international strawberry supply chain. Appropriate order policies were determined using parameters both with and without costs for expected shelf life losses. Shelf life losses during transport and storage were predicted using microbiological growth models. The performance of the resulting policies was assessed using a hybrid discrete event chain simulation model that includes continuous quality decay.Findings– The study's findings reveal that the order policies obtained with standard cost parameters result in poor product quality and large amounts of product waste. Also, including costs for expected shelf life losses in sourcing strategies significantly reduces product waste and improves product quality, although transportation costs rise.Practical implications– The study shows that in perishable product supply chain design a trade-off should be made between transportation costs, shortage costs, inventory costs, product waste, and expected shelf life losses.Originality/value– By presenting a generically applicable methodology for perishable product supply chain design, the authors contribute to research and practice efforts to reduce food waste. Furthermore, product quality information is included in supply chain network design, a research area that is still in its infancy.