Abstract
The position of decoupling point denotes the penetration degree of customer demand into supply chain. To optimize the performance of deteriorating food supply chain, we consider the decoupling point control in conjunction with food production and inventory management under time-varying demand over a finite time horizon. Using dynamic models, optimal position of decoupling point and production-inventory plan are simultaneously determined. The results show that the optimal decoupling point is not related to the change of food demand under zero-inventory policy and it is a monotonically ascending function of demand rate under production smoothing policy. The simulation illustrates a diagram depicting that the optimal decoupling point shifts to the upstream suppliers along with the increase of food deteriorating rate while shifts downstream to the end customers with the growth of the time elasticity of food demand.
Highlights
In the last decade, the market for fresh foods has continued to expand (Taylor et al, 2012; Qin et al, 2014)
With a focus on the application of the optimal solutions, we further analyze two different production policies sampled by zero-inventory policy and production smoothing policy
Optimal solution for General Dynamic Model (GEN) under zero-inventory policy: An important issue in the proposed GEN model is the determination of the target production rate and the target inventory level which are highly dependent on the planning policy
Summary
The market for fresh foods has continued to expand (Taylor et al, 2012; Qin et al, 2014). The foods can spoil or deteriorate, which often results in product loss as well as economic loss. It is estimated that as much as 25-30% of perishable food production is wasted (Coulomb, 2008; Stonehouse and Evans, 2015). In the food supply chain, manufacturer and retailer have to manage their productions and inventories with full consideration of deterioration (Zhang et al, 2015; Chebolu-Subramanian and Gaukler, 2015). How to design a production and inventory system for fresh foods to decrease cost and meet customer requirements are a current managerial concern as well as an important research issue
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