A novel location-inventory-routing problem in a two-stage red meat supply chain with logistic decisions: evidence from an emerging economy

Abstract

Purpose

This study focuses on a specific method of meat production that involves carcass purchase and meat production by packing facilities with a novel two-stage model that simultaneously considers location-routing and inventory-production operating decisions. The considered problem aims to reduce variable and fixed transportation and production costs, inventory holding cost and the cost of opening cold storage facilities.

Design/methodology/approach

The proposed model encompasses a two-stage model consisting of a single-echelon and a three-echelon many-to-many network with deterministic demand. The proposed model is a mixed-integer linear programming (MILP) model which was tested with the general algebraic modelling system (GAMS) software for a real-world case study in Iran. A sensitivity analysis was performed to examine the effect of retailers' holding capacity and supply capacity at carcass suppliers.

Findings

In this research, the number of products transferred at each level, the number of products held, the quantity of red meat produced, the required cold storage facilities and the required vehicles were optimally specified. The outcomes indicated a two percent (2%) decrease in cost per kg of red meat. Eventually, the outcomes of the first and second sensitivity analysis indicated that reduced retailers' holding capacity and supply capacity at carcass suppliers leads to higher total costs.

Originality/value

This research proposes a novel multi-period location-inventory-routing problem for the red meat supply chain in an emerging economy with a heterogeneous vehicle fleet and logistics decisions. The proposed model is presented in two stages and four-echelon including carcass suppliers, packing facilities, cold storage facilities and retailers.

Citation

Rahbari, M., Razavi Hajiagha, S.H., Amoozad Mahdiraji, H., Riahi Dorcheh, F. and Garza-Reyes, J.A. (2022), "A novel location-inventory-routing problem in a two-stage red meat supply chain with logistic decisions: evidence from an emerging economy", Kybernetes, Vol. 51 No. 4, pp. 1498-1531. https://doi.org/10.1108/K-01-2021-0012