Wednesday, April 4, 2012

Food Supply Chains -- Competing on Freshness and Price

I have recently returned from two weeks in Sweden and I miss Sweden  already.

I  even miss the food, which was fabulous and tasted better than that in the US. I enjoyed the meals in the cafeteria at the School of Business, Economics and Law at Gothenburg University, where I sampled several lunches (and sneaked down for some dark chocolate as well) and the food in the cafes, bakeries, and the restaurants. During the two week period I dined on Swedish, Turkish, Italian, Indian, French, and even Polish cuisine.From my colleagues I learned about the big fresh produce auctions in Amsterdam but that bananas get shipped directly to Sweden.

Just before traveling to Sweden in mid-March, my doctoral student, Min Yu, and I finished the paper, "Competitive Food Supply Chain Networks with Application to Fresh Produce."  In the paper, we model the deterioration of fresh produce over time and under different storage and transportation conditions. In the network model, we also capture the discarding costs associated with the disposal of the spoiled food products and allow for product differentiation.

We utilize variational inequality theory to formulate the game theoretic problem in which the firms compete until a Nash equilibrium is attached.

 A case study in our paper focuses on the cantaloupe market, in which we analyze different scenarios prior to, during, and post a foodborne disease outbreak.