Restructuring the Indian agro-fresh food supply chain network: a mathematical model formulation

Abstract

In traditional Indian agro-fresh food supply chain (AFSC), authors identify the following four shortcomings through the literature survey: (1) unorganized supply chain structure; (2) low profitability of farmers; (3) high wastage of agricultural products; and (4) a large number of small-farm-holding farmers. According to the fourth shortcoming, 85% of farmers have less than 2 hectares of farming land, and these farmers transport their products independently into the market to sell. Owing to this, a higher transportation cost is incurred in traditional AFSC, which leads to low profit for farmers. To overcome these shortcomings, authors propose aggregation of products by forming clusters of farmers and its transportation from these cluster centers to market. This paper formulates multi-period, multi-product, mixed-integer nonlinear programming model to design a four-echelon supply chain with considering the clustering of farmers and perishability of products. A real case study problem of Mandsaur District (India) of vegetable distribution is solved in LINGO 17.0 to check the validity of the formulated model. The results revealed that 85% of the total distribution cost incurred in the transportation of products from farmers to the market. Hence, the major focus should be to design an efficient transportation plan for the minimization of transportation cost from farmers to the market. Further, sensitivity analysis shows that the proposed model is robust and sensitive to changes in maximum distance traveled by a farmer to reach a cluster center and number of hubs to be opened, respectively.