Abstract
Food hubs are of interest in regional and local food system development because they potentially enhance the sustainability of food supply chains. Expanding on earlier literature, this study introduces economies of scale into an aggregation hub location model and disaggregates production into four seasons to account for geographic and seasonal variation of US fresh produce production. A mixed integer linear programming model is formulated with the objective of minimizing total costs of assembly and first-handler operations. Results suggest scale economies have significant effects on the optimal number, locations, and sizes of aggregation hubs. We model regional and local food systems in a manner more consistent with economic theory and provide a richer framework for policy analysis.
Highlights
Our results show that the total quantity handled at Level 1 facilities in Scenario 2–4 is less than 2 percent, meaning that the Level 1 facilities play a minimal role in explaining the effect of scale of economics on the optimal solution of aggregation hub locations
Economies of scale play an essential role in shaping the food network structure
Our results provide strong evidence that scale effects have a significant impact on aggregation hub location solutions
Summary
This study will build an optimization model to identify the optimal locations and scale for county-level aggregation hubs sourcing from growers and We characterize and model an optimal US network of fresh produce assembly in which hub sizes and locations at county-level are endogenously determined.
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