Global supply chain network design for shelf-life products under uncertainty: a case study of pistachios

Abstract

PurposeSupply chain management has become critical in today’s globalized environment, with growingly intense competition on the international level. The particular characteristics of modern trade have led companies to globalize and devise increasingly sophisticated supply chains to meet customer demand worldwide. Motivated by the need to address these challenges, we have developed a new model for a global supply chain that incorporates uncertainties in exchange rates, demand fluctuations, and the quantity of produce.Design/methodology/approachThe objective of the proposed model is to maximize supply chain profitability. Our model optimizes several critical decisions in the proposed global supply chain, including the location of domestic and foreign distribution centers, allocating the centers to customers, transportation mode selection, storage temperature, optimal farm purchase quantities, product flows across the network, and the shelf-life of products. Scenario-based stochastic programming approach is employed to account for the inherent uncertainties within the model. A pistachio supply chain is examined as a case study in this article, and the efficiency of the proposed model is demonstrated through computational results.FindingsThe model was solved using the CPLEX solver in GAMS and the results, the Sirjan DDC and Turkey FDC have been selected. In general, 40% of demand for customers from FDC (turkey) and 60% of demand from DDC (sirjan) is provided. Changes in the demand of foreign customers make the net profit more effective than changes in the demand for domestic customers. The decrease in exchange rate decreases the network profit with a higher slope and the increase in exchange rate will increase network profit with a relatively stable slope.Originality/valueWhile research on GSCs for perishable products has been ongoing for several years, the importance of the subject necessitates continued investigation in this area. This paper aimed to address this gap by presenting an optimization model for designing GSCs for perishable products under uncertainty and with various transportation modes. The proposed model was designed with the aim of improving supply chain performance and real-world applicability.