The impact of inventory management on economic and environmental sustainability in the apple industry

• Published in: Computers and electronics in agriculture Vol. 163; p. 104848
• Main Authors: Paam, P., Berretta, R., Heydar, M., García-Flores, R.
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.08.2019; Elsevier BV
• Subjects: Apple supply chain; Configurations; Costs; Environmental management; Food loss; Food supply chain; Impact analysis; Inventory; Inventory management; Mathematical programming; Mixed integer programming; Optimization; Parameter sensitivity; Policies; Sensitivity analysis; Supply chains; Sustainability; Inventory management; Mixed integer programming; Food loss; Apple supply chain; Sustainability; Food supply chain
• ISSN: 0168-1699; 1872-7107
• DOI: 10.1016/j.compag.2019.06.003

•Proposing policies on the configuration of storage rooms in apple supply chains.•Contributing to the environmental and economic sustainability in apple industry.•Minimizing fruit loss and total costs by 7.7% and 1.5%, respectively.•Drawing insights to improve inventory operations via sensitivity analyses. This paper investigates the impact of inventory management optimization on fruit loss, and inventory and processing costs in apple supply chains. It proposes new inventory policies regarding the configuration of high-tech storage rooms, where apples are stored to meet the annual demand. Each configuration gives rise to a different set of storage room, which will preserve the apples for a specified period of time. To quantify the impact of these policies, we apply a mathematical programming model to the Australian apple industry and analyze the results for two different configurations of storage rooms: (1) a fixed number of each type of storage room and (2) a flexible arrangement in which different numbers of storage rooms of each type are active during different time periods. The comparative effectiveness of the two scenarios is investigated through a case study. The flexible configuration is found to be superior as it reduces fruit loss and total storage and processing costs by 7.7% and 1.5%, respectively, over the fixed configuration. Finally, a comprehensive sensitivity analysis of some of the parameters of the model is performed. This allows the provision of valuable insights and recommendations which empower apple industry stakeholders to improve their inventory performance.