Optimal Wholesale Facilities Location within the Fruit and Vegetables Supply Chain: A LP-MIP Heuristic Approach

Prepared for presentation at the 93rd Annual Meeting of the Transportation Research Board, January 2014, Washington D.C. and publication in Transportation Research Record July 2013



Population growth creates a challenge to food availability and access. To balance supply with growing demand, more food has to move from production to consumption sites. Moreover, demand for locally-grown food is increasing and the U.S. Department of Agriculture (USDA) seeks to develop and strengthen regional and local food systems. This article examines wholesale facility (hub) locations in food supply chain systems to facilitate the efficient transfer of food from production regions to consumption locations. The mathematical formulation is a mixed integer linear programming (MILP) problem that minimizes total network costs which include costs of transporting goods and locating facilities. A scenario study is used to examine the model’s sensitivity to parameter changes, including travel distance, hub capacity, transportation cost, etc. An application is made to the U.S. Fruit and Vegetable industry. We demonstrate how parameter changes affect the optimal locations and number of wholesale facilities.