Research on optimization of food supply chain considering product traceability recall and safety investment

Abstract

Strict food regulations, high‐quality product demand, and fierce market competition urge food enterprises to focus on the optimization strategy of product safety and traceability recall in the food chain. To better meet customers' safety and quality expectations and reduce the loss of problematic products that fail to be recalled in time, the paper establishes a two‐level food supply chain consisting of a single manufacturer and supplier, uses the Stackelberg game to explore the interaction between traceability recall and product safety optimization in the food chain, and finds the best food safety investment and product traceability recall strategy. And we consider the case of the former investing in the latter's product safety efforts. The results show that the food safety premium sharing rate determines the optimal decision of manufacturers and suppliers when each member is faced with the difference between the loss cost of unrecalled food per unit and the traceable recall cost coefficient. In addition, the higher safety investment cost factor increases the burden on the entire supply chain and reduces the safety benefits of the food chain. Moreover, higher security investment cost factors increase the burden on the entire supply chain and reduce the safety benefits of the food chain. Interestingly, suppliers can take advantage of the increased cost per unit of unrecalled products to obtain higher safety investments when manufacturers implement recall measures for problematic foods. We also introduced blockchain technology and discovered Pareto optima for food safety. When the supplier bears part of the problem of food loss, food safety, quality, and investment are high. The conclusions show that product traceability recall is beneficial to the overall welfare of the food chain.