Reducing Unmet Demand and Spoilage in Cut Rose Logistics: Modeling and Control of Fast Moving Perishable Goods

Abstract

Fresh cut flower supply chains are aware of the need for reducing spoilage and increasing customer satisfaction. This paper focuses on a part of the cut rose supply chain, from auction house to several end customers. A new business mode is considered that would allow end customers to subscribe to florists and have a continuous supply of bouquets of roses. To make this business mode feasible, we propose to benefit from real-time information on roses’ remaining vase life. First, a quality-aware modeling technique is applied to describe supply chain events and quality change of cut roses among several supply chain players. Then, a distributed model predictive control strategy is used to make up-to-date decisions for supply chain players according to the latest logistics and quality information. This approach provides a tool for multiple stakeholders to collaboratively plan the logistics activities in a typical cut rose supply chain based on roses’ estimated vase life in real time. The proposed approach is compared with a currently used business mode in simulation experiments. Results illustrate that the new business mode and the planning approach could reduce unmet demand and spoilage in a cut rose supply chain.