Addressing the Location Problem of a Perishables Redistribution Center in the Middle of Europe

Abstract

This work aims to contribute to the debate on practical utilization of different location models for consolidation, redistribution, and repackaging centers in a supply chain to optimize shipments, thereby reducing food loss and waste, within the framework of quality of customer service improvement. The scenario in question is the creation of a redistribution center for highly perishable products (fruits and vegetables) from southeast Spain—the leading European supplier—for customers throughout Europe. It is estimated that 10% of exports (more than 530,000 metric tons) from this area are returned by customers due to minor defects. These products cannot be reused and are therefore wasted. Regarding the methodology, comparisons were made between the p-median, gravity p-median, and p-center models. Scenarios of change in demand and randomness in distances were also tested. In addition, the modelling used included the cost and time within a multicriteria optimization framework to assess the possibility of a transport mode change. It was observed, for example, that the gravity p-median model proved useful for perishable products and the logistics strategy chosen. Furthermore, the p-median model displayed strong robustness against long-term changes in demand and random distances. In general, it was demonstrated that this strategy would successfully reduce the response time and distance of shipment from the distribution center to the customers and thereby improve sustainability of the service, reducing the waste related to direct shipments. Furthermore, this research also demonstrated the difficulty of using intermodality in this context, mainly due to transit time, which would undoubtedly increase the waste generated.