A discrete event simulation model assessing the impact of using new packaging in an agri-food supply chain

Abstract

Fresh product loss is a global issue having negative impact on both the economy and the environment. The perishability of fruits and vegetables can lead to post-harvest losses in the supply chain as well as at consumer’s homes. Packaging plays an important role in preventing such losses. This paper focuses on the impact of new packaging on reducing product waste and other logistics costs. The objective is to evaluate the performance of an inventory control policy that uses new packaging to extend the shelf life of strawberries while maintaining their quality. We have developed a discrete event simulation model, that represents store inventory, by considering random consumer demand and random product shelf life, to assess various packaging types leading to different post-harvest lives of strawberries. We then use a simulation-optimisation approach to determine optimal inventory control parameters and conduct extensive numerical experimentations to evaluate the impact of the new packaging, under three distribution strategies (FIFO, FEFO, and LEFO). Results indicate that the new packaging has a significant impact: extending the shelf life of strawberries can reduce the total logistics cost by 0.66% (when using LEFO strategy) to 6.37% (FIFO strategy) and improve sales by 0.67% (FEFO) to 10.07% (FIFO).