Closing loops in agricultural supply chains using multi-objective optimization: A case study of an industrial mushroom supply chain

Abstract

Environmental concerns and scarcity of resources encourage decision makers in supply chains to consider alternative production options that include preventing the production of waste streams, and simultaneously reusing and recycling waste materials. Until now, hardly any quantitative modeling approaches exist in literature on closing loops in agri-food supply chains. In contrast to closed-loop studies in discrete parts industry, in agri-food supply chains the value of the final product itself cannot be regained. However, the components used for production such as organic matter or a growing medium, can be recycled. In this paper, the consequences of closing loops in a mushroom supply chain are revealed. We propose a multi-objective mixed integer linear programming model to quantify trade-offs between economic and environmental indicators and explore quantitatively alternative recycling technologies. The model was developed to re-design the logistical structure and close loops in the mushroom supply chain. We found that adopting closing loop technologies in industrial mushroom production has the potential to increase total profitability of the chain by almost 11% while the environmental performance improves by almost 28%. We conclude that a comprehensive evaluation of recycling technologies and re-designing logistical structures requires quantitative tools that optimize simultaneously managerial decisions at strategic and tactical level.