VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITYINTERNATIONAL UNIVERSITY PHAN THUY KIEU Student ID: PBAIU15003 DOCTORAL DISSERTATION Design and management of a perishable product supply ch
A, Research ODjeCtIVES ssessssessssesssssssssescssesessesssuecssuecasucesnecesucesucessutensuecenneceneesanecsaeenaeees 5 1,5, Research QueStiONS 7n nhanh
Main scientific assumption of the study 1.7 Scope of the Research 1.8 Research Methodology 1.9 Significance of the Proposed ẹe€se€dCè, ô-âccôâcescereerrreerrkerrrrerrr 13 1.10 Structure Of the DisSCrtAtin cecssscssscsesssesssessssecssesssesssesssisesseessessneessneessnes 15
(1) The supply chain will be built in stable conditions, unaffected by natural disasters and a socio-political economy.
(2) The production of sweet potato is only considered within the main components of farmers, cooperatives, traders, granaries, and export markets.
(3) The end consumers are export markets and domestic consumption.
(4) Both secondary and primary data are limited and only focus on the sweet potato in Vinh Long Province of the Mekong Delta region.
To the author’s knowledge, this is the first and official study on the design and management of the supply chain of sweet potato in Vinh Long.
Geographical limit: supply chain of sweet potato in Vinh Long Province Time limit: The research timeframe is from 2010 to 2019
Field limit: Sweet potato — a perishable product 1.8 Research Methodology
The following methodology was utilized in this dissertation ì
R : ` supply chain problems and N Y a Literature review fella NA supply chain design models
Assessment of current h value chain & current b Information supply chain of Vinh Survey
Build up mathematical model design supply chain for fresh product. ¢ Optimization d, New hybrie in model for Multicriteria { Application and
Student's original production and Making Decision Validation into supply
APN distribution model for : ì work (Publication.) Distribution center chain of Vinh Long selecting sweet potatoes e SWOT analysis
‘Pperaiure reviews Propose SC management for Student's original work sweet potato in Vinh Long,
Figure 1 Research Flowchart a) Systematic Literature Review
A systematic literature review avoids methodological errors by applying a well-planned review process and analyzing all primary studies transparently and objectively (Hochrein and Glock, 2012; Hochrein et al., 2015) to: (1) summarize existing research by determining patterns and issues and (2) identify the conceptual content underpinning the practices (Meredith, 1993) Thus, a systematic literature review, including both the theories and previous research on supply chains shows a gap in the research on applying design and management to a perishable product supply chain, specifically the supply chain of sweet potato in Vinh Long Province of the Mekong Delta region.
Over the last 20 years, many authors have concentrated on designing and managing supply chains for agri-fresh produce (Greenberg, 1995; Larson, 2001; Srivastava, 2007; Seuring and Miiller, 2008; Pokharel and Mutha, 2009; Carter and Easton, 2011; Esteso et al., 2018) However, there is a significant level of inconsistency and confusion in segmenting flowers and F&V such as grouped into food products without regard to product characteristics (Salin and Nayga, 2003; Faulin, 2003; Alfaro and Rábade, 2009); food products with a short shelf life (Doganis et al., 2006); agri-foods (Aramyan et al., 2007; Ahumada & Villalobos, 2009); fresh products (Fearne and Hughes, 1999); perishables (Broekmeulen and van Donselaar, 2009; Chen et al., 2009); deteriorating products (Lodree and Uzochukwu, 2008) Also some authors use fruit and vegetable (Cadilhon et al., 2005; Bertail & Caillavet, 2008; Ucak et al., 2018) while some authors discussed a specific product such as oranges (Caixeta-Filho, 2006); grapes (Ferrer et al., 2008); lily- flowers (Caixeta-Filho et al., 2002) Therefore, this study only focuses on fruit and vegetables, defined as agri-fresh products to distinguish from other agri-produce and non-agri produce.
The study classified decision levels, modelling approach, and performance management based on the literature used by (Ahumada and Villalobos, 2009; Mula et al., 2010; Soto-Silva et al., 2016).
Figure 2 Proposed taxonomy criteria (the author built)
The proposed taxonomy criteria of the systematic literature review was presented in Figure 2 Four sectors depict the supporting supply chain models: (1)Published journals; (2) Modelling approaches that consider the mathematical methods or mathematical relationships used to model and address problems in the context of the agri-fresh supply chain However, most of the selected papers used applied linear programming (LP), particularly Mixed-integer Linear Programming(MILP) models while other techniques rarely have been used; (3) Decision levels span from strategic to tactical to operational Most of the selected papers focused on tactical and operational levels, paying attention to transporting, routing, planning,and allocation problems due to production and distribution steps Few focused on strategic decisions; (4) Performance measures consisting of four main components:efficiency, flexibility, responsiveness, and food quality (Aramyan ef al., 2007) In general, the cost function was always the priority choice for the maximum benefit.Moreover, these selected papers did not reflect how effective each supply chain has been based on performance indicators For these reasons, further research should fill this literature gap and extend the theory and practice of AFSC design and management, especially b) Information Survey
An information survey on the issues to be addressed was carried out First, secondary sources of data from 2010 to the present were collected from two levels: Level 1, Department of Statistics, Binh Tan District; Department of Science and Technology, Department of Industry and Trade, Department of Agriculture, and Department of Transport of Vinh Long Province; The Binh Tan District People's Committee and the District DARD; Level 2, Theoretical system of supply chain, especially agri-fresh products in Vietnam, and in the Mekong Delta region.
Second, primary data came from a group interview and direct interviews from farmers, cooperatives, enterprises, and distribution/consumption agents in Binh Tan District using a Question list (Appendix 5) There also were in-depth interviews with scientists, state managers of Binh Tan District, and big traders in Binh Minh town using open questionnaires (Appendix 2).
Observations were also made during field trips in the districts of Vinh Long Province Under the plan for restructuring the production area of six main products of the locality, Binh Tan District continues to identify sweet potato as one of the six main products, with an area of 10,500ha-13,900ha concentrated in the communes of Thanh Loi, Thanh Dong, Thanh Hung, Tan Thanh, Tan Hung, Tan Luoc, and Tan
An Thanh and a part of My Thuan and Nguyen Van Thanh communes The average productivity is 28-30 tons/ha, and the seasonal structure includes two vegetables- one rice and two rices-one vegetable According to the Department of Agriculture, Binh Tan District, over 58,000 laborers are involved in sweet potato in the locality. Cultivating sweet potato requires many laborers to fertilize, prevent pests, weed, harvest, and transport.
The sample size consisted of direct, group, and in-depth interviews as follows: (1) Farmer households: 160 direct interviews and 193 group interviews; (2) Traders:
73 in-depth interviews; (3) Private: 1 in-depth interview; (4) Cooperatives: | in-
10 depth interview; and (5) Management group: 2 group interviews and 9 face-to-face interviews Thus, a total of 439 interviews were conducted.
Table 2 Observation structure for each factor
Factor in the chain Sample size Interview method
Farm households produce 353 including 160 interviews and9 Direct, group, and in-depth group interviews (193 households) interviews with the prepared questionnaire structure.
Private enterprise 1 in-depth interview
State manager 11 including 2 group interviews and 9 in-depth interviews
Optimization models are considered as effective support tools for decision makers when solving the location problems, particularly for agriculture products (Esteso et al., 2018) This dissertation conducts MILP model for selecting the location of distribution centers (DC) that minimize costs and transit time along the chains Software used to solve the models is IBM CPLEX Optimizer Beside, the other of distribution center could be find out when trading-off between between two objectives by compromised programming. d) Hybrid Multiple criteria decision making (MCDM) Model
SF-AHP is utilized to determine the relative weight and the importance of factors as well as eliminate the less important factors in all of criteria related to choosing location, and also handle decision-making problems, vagueness and uncertainty in criteria and has the advantages of easy to use and flexibility.
Together with analytical solutions obtained from the MILP model, the dissertation utilizes a special Analytical Hierarchy Process method - a Hybrid MCDM to support the DC location selection problem of perishable agricultural products, named Spherical Fuzzy Analytic Hierarchy Process (SF-AHP) and a method so called Combined Compromise Solution (CoCoSo) algorithm The proposed model was applied to the case study of the sweet potato of the Mekong Delta region to demonstrate its feasibility.
Calculate the DC location selection criteria weights using SF-AHP
Employing CoCoSo to determine the ranking of the alternatives
Figure 3 Research Graph (the author built) e) SWOT analysis
Using SWOT analysis as a supporting tool to strengthen the best solution through strengths to reduce the perceived weaknesses, utilize identified opportunities to reduce or eliminate the impact of threats (Dyson, 2004).
To increase the objectivity for the determination of the location of DC as well as to match the actual situation and the socio-economic development of the locality. g) Coordination theory
A body of principles about coordinating the activities of separate actors.
- In this research, the author only focused on one group of people, which meant concentrating on the linkage of actors throughout the supply chain. h) Application and Validation.
The case study of the sweet potato in Vinh Long Province tested the proposed model Policy suggestions and recommendation were offered for the proposed supply chain coordination of sweet potato in Vinh Long Province.
1.9 Significance of the Proposed Research
Two important contributions are made in this research study.
Firstly, cost and transit time are two of key factors, that contributed inefficiently supply chain of agricultural products, reducing the competitiveness compared to other countries, especially agri-fresh produce in reality Theoretically, to solve problems of optimizing costs and freight time, it is first necessary to determine the optimal route to transport goods, and the distribution center to collect and deliver goods, by using the linear programming problem model.
In recent years, the global market has been volatile in order to survive and grow, companies must focus on building business strategies that help reduce costs, continually improve quality, and increase satisfaction customer performance and on- time delivery Therefore, the identification of an optimal location for the construction of a distribution center is one of the most important decision-making problems This decision requires achieving all the above objectives In this research, the authors propose a MCDM-based approach, utilizing spherical fuzzy analytic
LITERATURE REVIEW ccssssssssssessssssessssessssesesseeesnessseeseoes 17 2.1 Overview Agri-fresh PYOdUce ssscssscsssssessseessessscsnecssesssssesssiesseesseessneessneessnees 17 2.2 Design and Management of Supply Chain Theory 2.3 Multi-criteria Decision-making theory (MCDM) 2.4 Conceptual Framework
Chapter 2 is the systematic literature systematic review, using content analysis both the theories and previous research on SCs, shows a research gap on applying design and management for a perishable product SC, specifically the SC of sweet potato in Vinh Long Province of the Mekong Delta region.
This section will summarize major trends related to designing and managing agri-fresh produce supply chains (AFSCs) over the last 20 years (Greenberg, 1995; Pokharel and Mutha, 2009; Seuring and Miiller, 2008; Srivastava, 2007).
2.1.1 The fruits and vegetables (F& V) perspective
Agricultural produce constitute a major part of the world economy and are the raw material for many industries Shukla and Jharkharia (2013) identified agri-fresh products as including flowers and F&V (see Figure 4).
Agricultural Products Feed produce (Milk, Eggs )
| Long shelflife (grains, Processed produce Fresh produce (Flower,
“+ —— pulses, spices ) (Meals, sauces ) Fruits and vegetables)
Figure 4 Product differentiation (Shukla & Jharkharia, 2013)
Figure 4 describes a detailed differentiation of various products to enhance the understanding of agri-fresh produce This research only focuses on F&V due to a significant level of inconsistency and confusion and uses commonly accepted names such as F&V (Cadilhon et al., 2005; Bertail and Caillavet, 2008).
Production of F&V in Vietnam has increased steadily over the years from increased land for cultivation and expanded F&V production capacity In 2019, the export turnover of this commodity was 2.1 times the import turnover” According to the Ministry of Agriculture and Rural Development, the export value of F&V in
2020 reached 3.26 billion USD, a decrease of 13% compared to 2019 China is the largest importer of Vietnamese F&V, accounting for about 56% of the market share in 2020 and 64.8% in 2019, equal to USD 2.430 thousand? Due to rising incomes, Vietnamese consumers are increasingly concerned about the quality of their food and tend to use pesticide-free and organic vegetables, which helps Vietnam agricultural products enter larger markets.
However, Vietnamese F&V face significant challenges from the trading competition with other exporting countries and technical barriers from importing countries, especially requirements concerning quarantine, safety, prices, environmental conditions, and seasonality (Shi et al., 2015) Moreover, the value chain of the F&V industry in Vietnam is not particularly efficient F&V are mainly produced by farmers, who are unable to fully exploit the available potential As a result, before reaching consumers, their crops pass through many intermediaries‘.
? https://vietnamcredit.com.vn/news/overview-of-vietnams-fruit-vegetable-industry_14163
3 https://www.mard.gov.vn/en/Pages/vegetables-and-fruits-exports-reached-3-26-billion-usd-in-2020.aspx
4 Using reliable data sources from VietnamCredit, the Ministry of Agriculture and Rural Development, the General
Department of Customs, the Vietnam Fruit and Vegetable Association, and other prestigious research institutions
No Year Export value of F&V (Thousand USD) Import value of F&V (Thousand USD)
Source: The Vietnam F&V Association (VINAFRUIT), The Ministry of Agriculture and Rural Development
Vietnam currently exports to 60 countries, including the EU, United States, China, and other Asian countries With the increases in free trade agreements with trading partners, the regional exports for F& V are expected to increase in 2021 Even in the domestic market, with an increasingly professional F&V system, the origin of labels supplied to big cities is growing very fast, which is a good sign It is an important step in moving the F&V industry towards professionalization, ensuring the supply for large urban markets, and exporting.
This research concentrates on a specific product, the sweet potato, that is a perishable product of the Mekong Delta region, like other products discussed in the literature, such as oranges (Caixeta-Filho, 2006), grapes (Ferrer et al., 2008), lily- flower (Caixeta-Filho et al., 2002), in which high supply and demand uncertainty relate to product quantity and quality, origin, and time (Refer to Table 6 page 15, Appendix 1).
2.1.3 Overview of the sweet potato in Vinh Long Province
Vinh Long, one of 13 cities and provinces in the Mekong Delta Region, is in a special geographical location, with downstream of the Mekong River and between others connected to the Mang Thit River and the dense river system linking international transportation through several sea gates With its mild climate and fertile land, Vinh Long has the immense potential for agricultural production It
19 plays an important role in developing the Mekong Delta region and the country as a whole.
Figure 5 Mekong Delta Region and South East Region of Vietnam*
Sweet potato is one of the main crops in Binh Tan District, Vinh Long Province, along with rice, pomelo, king orange, longan fruit, and rambutan The province has 13,000 ha that produce nearly 400,000 tonnes of sweet potato per year Vinh Long has a concentrated intensive production area with many varieties, but the
5 Google Map, Mekong Delta Region, Vietnam Available online: — https://www.google.com/maps/
Japanese purple sweet potato accounts for 90% of the area and nearly two-thirds of the Mekong Delta region Yam is planted year-round, bringing income to farmers 7 times higher than rice However, sweet potato is currently exported about 86% to the Chinese market; only a small percentage to other markets, such as Japan, South Korea, and Australia.
According to the General Statistics Office, the total sweet potato planted area in Vietnam has decreased from 150.8 thousand ha in 2010 to 116.5 thousand ha in
2019, a 22.75% decline In contrast, the planted area in Vinh Long increased dramatically from 5.8 thousand ha in 2010 to 13.8 thousand ha in 2019, a 238% increase.
Table 4 Planted area of sweet potatoes by province from 2010 to 2019
Source: https://www.gso.gov.vn/SLTK/
Planted area of sweet potato by province from 2010 to 2019
OVietnam OMekong Delta Vinh Long
Figure 6 Planted area of sweet potato by Province from 2010 to 2019
In terms of production of sweet potato by province, Vinh Long jumped from 170.7 thousand tons in 2010 to 377.5 thousand tons in 2019, ocuppying about 67.9% of the Mekong Delta region and 26.9% of Vietnam, respectively.
Table 5 Production of sweet potatoes by province from 2010 to 2019
Source: https://www.gso.gov.vn/SLTK/
Production of sweet potato by province from 2010 to 2019
Figure 7 Production of sweet potatoes by province from 2010 to 2019
Sweet potato productivity has increased to 11.61 tons; 23.41 tons; and 25.95 tons per ha in Vietnam, the Mekong Delta region, and Vinh Long, respectively.
Table 6 Productivity of sweet potatoes by province from 2010 to 2019
Source: https://www.gso.gov.vn/SLTK/
Data in the period 2010-2019 from the General Statistics Office showed that the sweet potato has grown in the total agricultural land, production, and yield continuously, in terms of sweet potato-producing land from 5.8 thousand ha and 170.7 thousand tonnes with a yield of 29.43 tonnes per in ha 2010 to 13.8 thousand ha agricultural land; 377.5 thousand tonnes; and 27.36 tonnes per ha yield in 2019. However, in recent years, there has been a decline, which should be taken seriously, and necessary measures must be implemented to fuel growth.
Productivity of sweet potatoes by provinces 2010-2019
“@-Vietnam =ê-Mekong Delta Vinh Long
Figure 8 Productivity of sweet potatoes by province from 2010 to 2019
To sum up, this research choose sweet potato in Vinh Long province as the representative fresh agricultural product of the Mekong Delta region due to occupying the largest proportion in the 13 provinces of the Mekong Delta region.
2.2 Design and Management of Supply Chain Theory
2.2.1 Value chain and value chain analysis (VCA)
2.2.1.1 Definition of value chain (VC)
Porter (1985) first put forward value chain theory in the competitive advantage context, defining the various activities performed in particular links in the chain The author distinguished different stages of the process of supply (inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service), the transformation of these inputs into outputs (production, logistics, quality, and continuous improvement processes), and the support services the firm marshals to accomplish this task (strategic planning, human resource management, technology development, and procurement) Porter (1985) drew a clear distinction between basic activities or major activities that directly add value to the production of goods (or services) and the supporting activities that have indirect effects on the production of goods (or services), the final value of the product.
RESEARCH MODEL AND METHODOLOGY
Explaination for mapping value CÌ@ÌH4 -e sscsseseesxveecxtesrrveerxeeerrerer 49 3.3 Using mixed integer linear programming and compromised programming to
The VCA of fresh produce was generalized based on the earlier research literature available A detailed scheme of sampling and analysis focused on understanding pre- and post-harvest crop management by the farmers and other channel partners until the end of the supply chain Focusing on farmers and the organization of the supply chain that lies at the root of this concept Maximizing their profits could serve as typical example operating throughout the sweet potato farming in Vinh Long (Rieple & Singh, 2010).
More recently, the concept of VCA includes aspects of the horizontal analysis of a set of specific actors at one stage of the chain and the role of policies, institutions, and laws in shaping markets The key underlying motivation is to identify opportunities where stakeholders in the value chain can work together to improve efficiency, reduce costs, and add value in ways that better satisfy the consumer (Bernet et al., 2006; Devanney, 2006; Soosay et al., 2012).
This research used the second tool of value chain analysis, called mapping the value chain (M4P, 2008) to analyze operation added value and upgrade its chain (Loc, V.T.T., 2016; Taylor, 2005) The sweet potato value chain is built from the survey results of actors participating in the chain and observations from documents and experts As a result, the diagram of current supply chain is drawn after analyzing its value chain to measure the overall effectiveness of products and determining the specific contribution level of each actor From then, administrators can make appropriate decisions (Fearne et al., 2012; Taylor, 2005)
The mapping tool is designed to provide an initial overview of the key aspects of value chain through the 11 stages discussed below.
3.2.1 Step 1 Mapping the core processes in the value chain
Find the core processes that the raw material goes through before it reaches the final consumption stage.
3.2.2 Step 2 Identifying and mapping the main actors involved in the processes
Determine the actors involved in the value chain.
3.2.3 Step 3 Mapping flows of products
Map the flows of products, created a clear picture of what forms of products are handled, transformed, and transported at each process stage of the value chain
3.2.4 Step 4 Mapping knowledge and flows of information
Map what kind of knowledge and flows of information through value chain. 3.2.5 Step 5 Mapping the volume of products, numbers of actors and jobs
Find out the size of the different channels within the value chain
Step 1: Mapping the core processes in the value chain
Step 2: Identifying and mapping mồ main actors involved in th processes
Step3: Mappine tows of products Step 4: Mapping imowled and flows of information
Step 5: Mapping the volume of reins, numbers of actors and jobs
Step 6: Mapping the opraphival flow of the product or service
Step 7: Mapping the value at different levels of the value chain
Step 8: Mapping relationship s and linkages between value chain actors
Step 9: Mapping services that feed into the value chain
Step 10: Mapping constraint and potential solutions
Step 11: Making a value chain matrix
Figure 16 Summary 11 steps of mapping the value chain (M4P, 2008)
3.2.6 Step 6 Mapping the geographical flow of the product or service
Map how the product travels from intermediary trader to wholesaler, retailer, and final consumer From 6 steps above, the construction chain diagram can be seen visually with the entire production, cultivation, business, key actors in the chain, input supporters, and product distribution channels.
3.2.7 Step 7 Mapping the value at different levels of the value chain
Assess the capacity and economic performance of the chain, including the determination of value-added at stages in the value chain, production costs, and income of operators, including assessments of total value added, production costs, revenues, and profits. o Value-added: The difference between the total value of the sale and the value of the intermediate goods, which is the important level created in the VC Value-added is calculated by subtracting the purchase price from the purchase price but excluding additional costs (Value-added selling price — purchase price). o Production cost: The amount to be spent on buying the necessary inputs for the production and business process to gain profits. o Turnover: The entire amount collected after the sale is made. ©_ Profit (Pr): From the point of view of the VC, this is calculated by subtracting the additional expenses (Pr = Value-added— additional costs), profit, or net value-added. o Value-added analysis: Input costs (e.g., raw materials and services provided) must be deducted from the sale price or the revenue of each actor in the chain To calculate the added value with high accuracy, ensuring its meaning, the figures must be associated with production costs and profits.
3.2.8 Step 8 Mapping relationships and linkages between value chain actors
Include numbers and sequence diagrams Depending on each specific relationship, the chain analysis focuses on any relevant aspect, such as services, subject characteristics, general political, and legal and institutional conditions that prevent or encourage chain development The sequence diagram is described through the following components:
(1) Chain functions: A series of production stages involved in the chain, such as production, collection, processing, trade, and consumption.
(2) Chain actors: Those who perform a chain function include: Input suppliers, producers, processing companies, and traders They can be individuals, cooperatives, and businesses, and government agencies.
(3) Distribution channel: The path of the product from production to consumption in the chain It is usually a main channel and several sub-channels. Through distribution channels, we know how products are sold From that, we can know consumer trends and customer psychology to orient production, to evaluate effectiveness.
(4) Integration: In VCA, business linkage is an indispensable factor For the linkage process between the actors in the VC to improve, it is necessary to implement horizontal and vertical integration.
As a result of linking actors in the chain, the benefits are as follows: (1) low input cost and high quality; (2) large-scale production and homogenous products; (3) information seized quickly and timely market; (4) distribution without intermediaries; (5) reduced shipping costs; (6) right to decide the selling price; (7) trust and transparency in trading; (8) supportive policies and incentives from the
52 government; (9) local authority support from all levels; (10) state law support; (11) train and exchange experience; and (12) ensure sustainable production development.
The results from linking actors in the chain include benefits such as: (1) low costs; (2) sales of products with large volumes; (3) good and uniform product quality; (4) stabilizing output products on price and quality; (5) improved competitiveness; (6) obtain information about the market quickly; (7) easy to share information; (8) contract of underwriting products protected by law; (9) product quality assurance; and (10) increased added-value (11) Ensure sustainable production.
3.2.9 Step 9 Mapping services that feed into the VC
General political, legal, and institutional conditions prevent or encourage chain development.
3.2.10 Step 10 Mapping contraints and potential solutions
Constraints exist at almost all process levels of any VC, and potential solutions can be identified
3.2.11 Step 11 Making a VC map matrix
A VC matrix summarizes the key information
3.3 Using mixed integer linear programming and compromised programming to select the best distribution center solution
Establishing an appropriate SC is a vital issue for every business and industry in today's globally competitive environment It is necessary to identify and promote the role of each stage to maintain sustainability, improve competitiveness, expand market share, reduce costs, and take the initiative in production and trading Any agricultural SCND effectively needs a DC, considered as the facility location
53 decision (Melo et al., 2009) and connected in detail logistics activities, such as vehicle routing, inventory management, robustness, and reliability (Larson, 2001).
Moreover, the major objective of transportation and logistics management includes designing an optimal logistics offering by evaluating alternative transportation scenarios that consider the perishability and damage of fresh F&V while in transit (Cruijssen et al., 2007) to reduce the transportation costs in the fresh produce F&V SCs where transportation and logistics costs make up a significant percentage of the costs of goods or services provided (Simchi-Levi et al., 2004) For this, a capacitated MILP and compromised programming are used as the mathematical approach to model and solve decision problems related to the F&V supply chain, based on the IBM CPLEX Optimizer to choose a DC when trading- off between cost and transport time while considering characteristics in the sweet potato SCND problems.
Characteristics should be considered in SCND problems by using mathematical models, particularly for agriculture products.
(1) Product: The model is designed to find solutions for the system to solve the
SC problem regarding many different types of agricultural products that can create a space to expand scale and develop the SC and logistics system later.
(2) Transportation: The model can find solutions in multimodal transport conditions, focusing on roadway and waterway transport.
(3)Time: Most activities, including cultivation, harvesting, transportation, and trading agricultural products, are affected by seasonal factors and cyclical changes in market demand, especially in China So, the mathematical model should take the parameters of the decision variable to carry the function of the time element.
(4)Flexibility: The optimal model uses the compromise programming method to support multi-objective DM that is more flexible based on a set of changes in priority between optimal goals.
3.3.2 Indices, input parameters, cost function components, and decision variables
The indices to formulate the concerned SCND problem:
Table 7 Notation of the mathematical model
Set of products Set of markets Set of potential distribution centers Set of plants
Set of periods ơ tt ứ mm XZ v Set if transportation mode
Z =` Ry c.- ` oN DA nN BF WN mm N Set of routes
The parameters to formulate the concerned SCND problem:
Table 8 Technical parameters of the mathematical model
1 CAR, Supply capacity of plant sTM for products pTM
2 CAPCy Production cost of product ph
3 FC), Fixed cost for building warehouse h"
4 cs Inventory cost of product pTM
S Dry: Demand of market r for product ph
6 QRP, “Quality reduction point” of product ph
7 Sly “Shelf life” product pTM
8 tee Transportation cost of route z
9 ts Average inventory time of product ph
10 tt, Transportation time of route zTM
WL Diy; Distance from i" to j when using transporter th
Function of diminished quality of product ph for
Function of transportation cost with respect to
Function of transportation time with respect to
15 G1 Optimal value of objective 1: transportation cost
16 G2 Optimal value of objective 2: transportation time
The following decision variables to formulate the concerned SCND problems:
Table 9 Decision variables of the mathematical model
Am Quantity of product p" is transported by route zTM at period 1"
2 Yoo Quantity of product pTM is harvested in plant sTM at period I"
3 Qn 1, if the DC is located at potential DC h", otherwise 0
As mentioned above, some parameters have direct values from the collected data Others are special parameters that need to be processed and pre-computed as the quality loss function of the product (@,,) According to Osvald and Stirn (2008), this parameter is calculated based on:
= xị TT P —” ỉzp = min ; sl, ;
The cost of transport by inland waterways is approximately 10 times lower than that of land (Verdouw et al., 2010) The above functions are presented in table below:
Table 10 Function of transportation cost unit
Roadway Waterway a(DI,;) tit) VND/ton
(DI ) Di; Di; Ị tị H ơ ơ ours Average velocity in roadway Average velocity in waterway
Economic efficiency is one of the greatest considerations in SCND In this case, the logistics cost includes cultivation costs and fixed investment costs The total cost is shown in equation (1):
Minimize ằ ằ ằ (tzpXzp1) + CAPCyX zp1(1 — Pzp))