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Int. J.

Production Economics 140 (2012) 731–736

Contents lists available at ScienceDirect

Int. J. Production Economics


journal homepage: www.elsevier.com/locate/ijpe

Chilled or frozen? Decision strategies for sustainable food supply chains


Simone Zanoni, Lucio Zavanella n
Dipartimento di Ingegneria Meccanica e Industriale, Universita degli Studi di Brescia Brescia, Italy

a r t i c l e i n f o abstract

Article history: Along the food supply chains (FSC), energy plays a strategic role, being fundamental to guarantee
Received 14 April 2010 quality and influential in the determination of economic values. Moreover, the same type of product
Accepted 28 April 2011 may flow through chains differing in energy requirement, processing equipment and time spent in the
Available online 11 May 2011
chain itself.
Keywords: These differences between the FSCs (short vs. longer product lives and storage times, fast vs. slower
Food supply chain transportation, low vs. higher energy contribution) motivated the study, which aims at capturing in an
Cold chains analytical model the relationships between the relevant parameters influencing the problem, thus
Perishables addressing a possible approach to the chain optimisation.
By the modelling approach proposed, jointly looking at economic aspects and energy efforts
required to condition and preserve the product quality over time, it is possible to address new
considerations for understanding FSCs peculiarities, so as to support decisions and improving the
sustainability of the solution adopted.
& 2011 Elsevier B.V. All rights reserved.

1. Introduction Food quality and the nutritional value of food itself could be
related to some important nutrients characteristics (e.g., vitamin
There are several and different ways for treating and preser- C level for several vegetables, sugar level for several fruits,
ving food: however, the greatest part of them requires some proteins for meat, etc.), which begin to deteriorate immediately
contribution of energy. For example, heating was used since the upon harvest or butchery: the aim of cold chains is both to
oldest times, because of warm sources availability, while produ- preserve quality and to limit the loss in value over the following
cing cold temperatures, excluding determined geographical areas, stages of the chain from the field to the consumer.
has acquired more relevance in the recent times, thanks to energy The present paper aims at investigating the role of energy in a
availability (refrigerators) and, in the years preceding, ice trans- FSC where a producer collects the products, freezing them to
portability. Nowadays, several supply chains for foods are based the temperature set for their preservation, and transports the
on chilled and frozen goods: different transport chains and their products to an intermediate distributor for cold stocking before
technical features are described in James et al. (2006). It is evident final delivery to retailers. The temperature level must be guaranteed
that a key element within these chains is energy, also in its throughout the chain, from the producer to the retailer and frozen
different forms, as it is a necessary source to guarantee quality- products face a cold storage the duration of which determines the
based processes. Furthermore, the use of energy implies the level of energy demand. Moreover, the lower the temperature, the
consumption of resources (frequently, non-renewable ones) and higher the energy required and the longer the product life:
this fact directly influences the sustainability of the FSC consid- i.e., the optimisation of the FSC outlined requires the modelling of
ered, together with its economic performance. the chain itself, taking into consideration the temperature set and its
Distribution and storage of frozen food fall into the category of impact on quality (i.e., food preservation, together with its nutri-
‘‘cold chains’’, in which the products are kept at low temperature tional values), energy and associated costs.
so as to preserve their quality. In ‘‘cold chains’’ energy should be The aim is to present a model for FSC configuration encom-
appropriately used to prevent food products deterioration over passing the influence of both temperature and storage time, thus
time, avoiding their value decrease (e.g., due to spoilage of appreciating their impact on product quality, costs and sustain-
perishable products) and guaranteeing quality preservation. ability of the chain, as related to quality degradation and energy
consumption.
To this end, the paper will be organised as follows. Section 2
offers a broader view of FSC, so as to set the problem dealt within
n
Corresponding author. Tel.: þ39 030 3715581; fax: þ39 030 3702448. an appropriate background. Section 3 gives the notation and the
E-mail address: lucio.zavanella@ing.unibs.it (L. Zavanella). framework for the proposed modelling approach. Section 4 is

0925-5273/$ - see front matter & 2011 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2011.04.028
732 S. Zanoni, L. Zavanella / Int. J. Production Economics 140 (2012) 731–736

devoted to the comments to the model and to some insights perishable goods, based on multi-temperature distribution cen-
offered by the model itself. Finally some concluding remarks tres, while Cai et al. (2010) discuss the issues of coordination
jointly and foreseeable developments are given in Section 5. between the producer and the distributor in fresh food chains.
van der Vorst et al. (2009) present a simulation tool for the design
of food chains, jointly taking into account food quality change and
2. Literature background environmental load of the different scenarios evaluated, consider-
ing different inherent uncertainties, too. An updated review of
FSCs present peculiar features with respect to other goods planning models in the agri-food supply chain is offered in
chains and, also from this point of view, FSCs reveal challenging Ahumada and Villalobos (2009), thus confirming the great atten-
aspects for inventory and production researchers (Zavanella and tion gained by the argument and the different approaches to it.
Zanoni, 2009). For example, FSCs are affected by peculiarities Recently, Akkerman et al. (2010) presented a comprehensive
close to typical production issues, but worthy of investigation review of the quantitative operations management research on
(e.g., Akkerman and van Donk, 2007): food distribution management: they discussed the state-of-the-
art and identified challenges for further research.
 frequently, setup times are sequence dependent (think about Finally, despite of their importance, distribution centres for
cleaning, equipment regulation and selection of packages) fruit and vegetables have received limited attention in the
both in time and costs; performance management literature (Manikas and Terry, 2010).
 the time of storing should be limited, not only because of The present contribution aims at studying the optimal replen-
limited shelf life, but also because of the need for dedicated ishment quantities along the chain, so as to meet efficiently the
equipment and space, which could be additionally limited market demand at the retailers, but taking into consideration the
when product mixing is to be avoided; and energy effort at the production site (due to the proper processing
 processing should be fast, by means of traced and high-quality of the products), the additional energy effort along the distribu-
systems. tion channel (as required to preserve the quality of the product
themselves) and the impact determined by the cost of product
However, food processing and distribution may refer to deterioration.
significantly different types of chains: this fact may be easily
perceived when comparing the supply chain of fresh foods
(characterised by short product lives, fast transportation and 3. Problem definition and notation
low energy contribution, mainly concentrated in the transport
phases rather than in stocking) and the frozen foods one (long The system studied consists of a distributor that procures
product lives, slower transportation, high energy contribution, and stocks chilled or frozen products from a producer (who
especially at the stocking phases). The short description given properly treated the products, e.g., freezing them) and trans-
spotlights the different role played by energy in these two chains, ports them to different retailers, thus reaching a final target
both in the form of energy (e.g., fuel and electricity) and time market for sale (Fig. 1).
intervals of energy usage (e.g., food stocking time before final The model proposed will try to capture the link between the
consumption). Of course, mixed situations may also be found in quality degradation rate of the food and the energy effort
practise, such as freezing–defrosting–cooking–freezing or fresh required for its preservation. From this point of view, the most
delivery-freezing. relevant parameter linking quality and energy is the tempera-
Moreover, in the recent years, the need for an accurate chain ture set to preserve food: the lower the temperature, the higher
control and its monitoring has emerged as one of the most critical the energy required along the chain and the longer the food
issues (Montanari, 2008). The need for guaranteeing food safety quality preservation.
and quality is directly linked to physical, biological and chemical
parameters, which frequently interact with each other, as in the 3.1. Quality change
case of temperature and moisture. From this point of view,
regulations are also playing a remarkable role in boosting the Even when the optimal temperature of the products is main-
application of new technologies and tailored managerial tained throughout the cold chain, the quality of the products
approaches to FSCs (Bogataj et al., 2005). decreases over time (Zhang et al., 2003). In general, quality
Within the scenario described, classic inventory models could degradation of food products depends on the storage time t, the
be implemented with appropriate adjustments (e.g., perishable storage temperature T, and additional parameters depending on
and variable holding costs) as well as new managerial practices the storage atmosphere. More generally, quality degradation may
could be investigated and successfully applied. To this end, efforts be described by the following equation (for more details see
have been produced by researchers, addressing the critical Labuza, 1982):
aspects and the relevant parameters of the problem. For example,
Zhang et al. (2003) present an algorithm to optimise the structure dq
¼ kqn , ð1Þ
of cold chains minimising storage and transportation costs dt
(considering product quality concerns). Zanoni and Zavanella where q is the quality of a product, k the rate of degradation
(2007) consider the shipping of a set of different perishable (depending on environmental conditions) and n is a power
products from a vendor to a buyer with the objective of mini- factor defined as the order of the reaction, determining how the
mising the sum of the inventory and transportation costs. Kuo reaction rate is dependent on the amount of quality q remaining.
and Chen (2010) propose specific chain architecture for Temperature plays a primary role in product quality degradation: the

Distribution
transport centre transport
Harvest Producer Retailers

Fig. 1. The considered chilled-frozen food supply chain.


S. Zanoni, L. Zavanella / Int. J. Production Economics 140 (2012) 731–736 733

link between the rate of quality degradation k and temperature T can


be expressed thanks to Arrhenius equation:

k ¼ k0 eðEa =RTÞ , ð2Þ

where k0 is a constant, Ea the activation energy [J/kg] (an empirical


parameter characterizing the exponential temperature dependence),
R the gas constant [J/kg 1K], and T the absolute temperature [1K].
Moreover, it should be noted that the temperature along the cold
chain distribution could be not always uniform (James et al., 2006).
Therefore, the total quality decrease may be related to the original
quality and may be determined by summing the quality decrease at
every step of the chain (depending on the temperature level at each
supply chain step).
So as to predict the quality levels, Eq. (1) suggests that it is
possible to estimate the quality level of a product q(T, t) according
to an initial quality (q0) given, the subsequent storage time
interval t and the degradation rate k. Thus it is possible to define
the following expression:
ðEa =RTÞ
qðT,tÞ ¼ q0 ek0 te : ð3Þ

Peleg et al. (2002) proposed to use a Weibull-power law model to


describe the isothermal degradation of food quality, depending on
storage temperature and time, as follows:
nðTÞ
qðT,tÞ ¼ q0 ebðTÞt , ð4Þ Fig. 2. Examples of quality degradation over time for different storage
temperatures.
where b(T) and n(T) are temperature-dependent coefficients. In
particular, b(T) can be described by the empirical model as
follows (Peleg et al., 2002):
So as to compare the energy efforts required at the different
bðTÞ ¼ lnð1þ emðTTc Þ Þ ð5Þ levels of the chain (e.g., the initial treatment at the producer is
generally more energy intensive than the subsequent storage
where T is the temperature [1C] and m and Tc are constants.
phases at the distribution centres), it is possible to consider the
According to figures available from real data on quality degrada-
physics of the cooling processes necessary to reach different
tion for different products categories, it is possible to empirically
temperatures and to maintain them. According to Rong et al.
obtain the values of parameters b(T), n(T), m and Tc so as to use
(2010), the ratio of the different coefficients of performance
the equations above to calculate the expected quality of food
(COPcooling) of the cooling phases required may be formulated as
products after storage, at given time periods and temperature
follows:
levels.
Some examples related to the equations above are shown Qcold Tcold
COPcooling ¼ ¼ : ð6Þ
hereafter for different food products (Hui et al., 2004). Examples Qhot Qcold Thot Tcold
are selected so as to allow the reader to appreciate the critical role
played by temperature on quality with respect to time (see the In formula (6), Qhot is the heat given off by the hot heat
case of fish) and the significant range of temperature allowed for reservoir, Qcold is the heat taken in by the cold heat reservoir and
the preservation of widely consumed vegetable goods (e.g., green Thot and Tcold are the absolute temperatures of the hot and cold
peas). Fig. 2 highlights the role of temperature and its impact on heat reservoirs, respectively. For sake of simplicity, it is possible
the quality degradation over time. It should be also highlighted to consider Thot as the average outside environmental tempera-
that different products show different sensitiveness to degrada- ture at the locations of the cold chain actors and, to this end, the
tion over time versus temperature: looking at Fig. 2 it is possible to reference temperature will be set at 20 1C.
observe how green peas spoil in quality (here intended as the Vitamin By means of Eq. (6), it is possible to compare the energy
C level) of 50% after 50 days when stored at  8 1C, while fish required (and the related economic and environmental impacts)
degrades its quality (here intended as the spoilage due to micro- to freeze the products to a planned temperature (e.g.,  30 1C),
organism proliferation) of 50% after 100 days if stored at  18 1C. instead of freezing them at a lower one (e.g., 20 1C):

243
COP30 1C ¼ ¼ 4:86,
3.2. Temperature effect 293243
253 COP301 C
As temperature along the cold chain may vary, synchronisa- COP20 1C ¼ ¼ 6:325, ¼ 0:768:
293253 COP20 1C
tion between each actor of the chain is desirable. In fact, the size
of the batch delivered determines the replenishment epoch and, The ratio between the two COPs indicates that, using 30 1C
considering that a determined quality level is to be assured to the as reference, the option to freeze the stuff at  20 1C requires the
retailers, the batch size is also influenced by the temperature set 76.8% of the energy required to freeze it at  30 1C. In fact, energy
for food preservation. In fact, the higher the temperature, the demand for food processing may be very intensive, also depend-
shorter the replenishment cycle to satisfy the demand according ing on the material conditioned and on the process considered
to the quality level given. Moreover, different temperatures at (e.g., in the case of bread, Le-bail et al., 2010).
storage and transportation phases will imply different energy To this end, Fig. 3 shows the relative cooling cost savings
efforts and, consequently, different costs and different levels of determined while using  30 1C as reference. It is also evident
environmental sustainability. that the different costs imposed may impact on the profit, as the
734 S. Zanoni, L. Zavanella / Int. J. Production Economics 140 (2012) 731–736

treatability of the model, even if it may introduce room for further


development. In fact, demand may vary within a cycle because of
the combination of the freshness of the product and its selling
price or due to seasonality in the food production or/and con-
sumption. In other terms, newly supplied products may be
characterised by a higher demand, because of their freshness
and regardless of their selling price. On the opposite, costumers’
wait for significant markdowns may alter the demand profile in
favour of the last part of the product useful life.

4.1. Costs at the producer side

The costs faced by the producer include two main compo-


Fig. 3. Energy-related cost savings (temperature reference  30 1C). nents: the first one depends on the batch size (e.g., variable costs
due to cooling and treatment process) and the second one is
independent of it (e.g., set-up of the cooling and treatment
quality variation may influence the value of the product process). The first component is directly related to the Specific
considered. Energy Consumption [kWh/kg] (SEC) required to cool a unit of
food to a given level of temperature, while the second component
3.3. Temperature and quality: joint effects depends on the specific treatment equipment. Moreover, it is
possible to link both of the components to the different tempera-
As already observed, food products (even when properly tures reached at the cooling process. At the producer’s facility, the
stored) are subjected to quality degradation over time. Conse- average total cost over time can be formulated as follows:
quently, so as to meet a constant demand, markdowns may be  
d
introduced at the different stages of the cold chain. Such a TCP ðQ ,TP Þ ¼ SEC ec d þ KP rTP , ð7Þ
Q
practise is quite frequent, and it may also aim at saving the
disposal costs due to products unsold after their useful life. The where ec is the cost of cooling energy [h/kWh], KP is the set-up
use of the markdown practise can be modelled as a convex cost at the production facility [h] and rTP is the ratio between the
holding costs over time (according to Ferguson et al., 2007) or, COP at the cooling temperature, set by the producer for treating
alternatively, the correspondent cost-loss over time can be the product (i.e., TP), and the COP of the reference temperature Tr
computed (according to Blackburn and Scudder, 2009). Of course, (for sake of simplicity, it will be set to 0, i.e., Tr ¼ 0 1C).
the use of different policies to control and face the variation of
quality and profits over time may also impact on the profile of the 4.2. Costs at the distributor side
demand during the cycle considered. The model presented here
does not include this aspect: however, markdown policies repre- The costs faced at the distribution centre may be resumed into
sent an interesting perspective for future research and for the three main categories:
model extension.
(a) fixed cost due to batch receiving (defined as KS);
(b) holding costs for keeping the product at the storing tempera-
4. The model
ture (defined as TS); and
(c) the loss in value, due to quality degradation, registered while
The previous sections discussed the role of temperature in a
product is held into the stock.
FSC, focussing on its relationship to energy (Section 3.2) and
quality degradation of food (Section 3.1). In a SC perspective, it is
necessary to identify the trade-offs between costs at the producer As far as category (c) is concerned, it is reasonable to assume
(depending on the temperature set at the production site), costs that the time spent at the distribution centre may rise up to a
at the central distribution centre (depending on storage tempera- significant part of the product useful life and, therefore, also the
ture and average stocking time at the distribution centre itself) distribution centre may be obliged to adopt a markdown policy,
and quality preservation of the products. In other terms, lowering thus setting a lower price for the goods affected by a lower
holding costs by increasing temperature may boost quality quality. It should be noted that, under a constant demand d faced
degradation, thus increasing the loss in value. by the distribution centre, some products will be shipped to the
To this end, the following decision variables are considered: retailers immediately after the arrival of the batch Q, i.e., without
any quality degradation, while some other products, belonging to
 The transfer batch size Q between the producer and the the same batch, will be shipped to the retailer after a period
distribution centre (it directly determines the average length length equal to Q/d, thus implying a quality degradation and,
of the storage period at the distribution centre itself). therefore, a loss in value.
 The temperature of food treatment at the producer’s side, TP, Recalling the quality degradation function in (4) and using its
and the temperature of food storage (at the distribution simplified version for n(T)¼1, the loss in value of a batch of size Q
centre), TD, which minimise the total cost over time of the may be expressed as follows, similarly to Rong et al. (2010):
Z Q !  
producer and the distribution centre operations. d
p Q ebðTÞððQ qÞ=dÞ dq ¼ p Q  ð1eððbðTÞQ Þ=dÞ Þ , ð8Þ
0 bðTÞ
The profile of the demand at the distribution centre, d, is
assumed to be continuous over time. Distribution centres are where p is the selling price of the products. The simplification
used to guarantee a continuous supply to retailers that operate introduced makes the problem formulation more tractable, but it
with a rapid distribution of products to the markets (Zhang et al., is also a reasonable assumption, as it implies that the cost loss is
2003). This assumption has been introduced for the analytical directly proportional to quality degradation. For example, as
S. Zanoni, L. Zavanella / Int. J. Production Economics 140 (2012) 731–736 735

already introduced, this case is evident when quality degradation


leads to the disposal of the damaged goods.
Therefore, the average total cost at the distribution centre may
be written as follows:
 
d Q d d
TCD ðQ ,TD Þ ¼ KD þ hs rTD þ p Q  ð1eððbðTD ÞQÞ=dÞ Þ , ð9Þ
Q 2 Q bðTD Þ
where hs is the holding cost, including the space and energy costs,
due to keeping a kilogram of product at the cooling temperature
for one day (i.e., [h/kg  day]) and rTD is the ratio between COP at
the storage temperature set by the distribution centre, TD, and the
COP of the reference temperature, Tr (set equal to 0 1C).

4.3. Total costs of the FSC considered

Considering Eqs. (7) and (9), the total cost of the cold chain
may be resumed as follows:
 
d d Q
TCðQ ,TP ,TD Þ ¼ TCD þ TCP ¼ SEC ec d þ KP rTP þ KD þ hs rTD
Q Q 2
 
d d
þ p Q ð1eððbðTD ÞQ Þ=dÞ Þ ð10Þ
Q bðTD Þ
Assuming TP ¼TD ¼T and since demand is exogenous, the
minimisation of TC with respect to Q is independent of the value
of d and it leads to the following:
  
d
min TCðQ ,TÞ ¼ KD þ KP rT þ p Q  ð1eððbðTÞQ Þ=dÞ Þ
bðTÞ
d Q
 þ hs rT subject to Q , d Z 0 ð11Þ
Q 2
Therefore, once given temperature T, it is possible to find the
optimal value of the transfer batch size Q by solving (11).
Moreover, a couple of values (Qn, Tn) may lead to the optimisation
of relationship (10) and, in some cases, the Q value may be Fig. 4. (a) Quality degradation while increasing the storage period and (b) total
costs function while varying the batch size.
influenced by the period: seasonality may affect the batch size
available or convenient, as during the initial and final parts of the
product harvesting. In such a case, i.e., when Q is assigned, it is 1967). The effect of freezing processes on product quality and its
possible to optimise (10) with respect to the optimal temperature features is discussed in Redmond et al. (2003); the same study
and, consequently, it is possible to identify the best profile of the draws a comparison between freeze–chilling and differently
chain in terms of cost and its sustainability with respect to energy conditioned potatoes, also with reference to different storage
requirements and food preservation. However, the present periods.
formulation of the objective function does not allow a full The case of cold processing and storing the par-fried French
analytical optimisation, thus introducing the opportunity for the Fried Potatoes (more technical details may be found in Davis and
numerical analysis proposed in the following section. Smith, 1963) will be used for an illustrative example. The main
combination of the variables, given a processing and a storage
temperature can be set arbitrarily as
5. Case study
d ¼ 1; hs rT ¼ 2; b ¼ 0:01; p ¼ 10; KD þ KP rT ¼ 500:

So as to show the usefulness of the model proposed, the According to these values, it is possible to calculate the quality
present section offers a numerical example referred to a well- degradation (which, for frozen potatoes, is intended to correspond
known product distributed in a frozen condition all over the to the relative vitamin C level expressed as the remaining
world in huge quantities, i.e., frozen potato products such as percentage with respect to the initial value in mg/100 g of
frozen chips, roast potatoes, hash browns and waffles. Potatoes products) while increasing the storage period, as in Fig. 4a. Given
are now the largest sold frozen food in the United States: more- both temperature and batch size, it is possible to appreciate the
over, the export value of frozen potatoes from US accounts for related total costs using (10) and, by its minimisation, the optimal
more than 0.5 billion$/year. The process to prepare frozen French batch size and the corresponding optimal value for the average
fried potatoes consists in washing, sorting and trimming of storage period are obtained.
potatoes, that are necessary to assure a clean and wholesome Looking at the joint optimisation of the decision variables in
product. Potatoes may or may not be cut into pieces and are deep (11), it is possible to replicate the results of Figs. 4a and b for
fried or blanched in a suitable fat or oil. The final product is frozen different sets of temperatures, so as to obtain the optimal
and stored at the temperature necessary for its preservation. combination of both of the parameters. The concept of the joint
Generally, frozen chips are par-fried so as to have a very fast search of the optimal couple of Q and T is graphically proposed in
cooking time. Fig. 5. Fig. 5a shows two different degradation curves, comparing
So as to guarantee an adequate level of quality, each country two different processing and storage temperatures: the dotted
sets Standards for Grades of frozen French fried potatoes by which line refers to the higher storage temperature, which implies a
the quality of the products is guaranteed (e.g., US Standards, more severe decline of the product quality during the storage
736 S. Zanoni, L. Zavanella / Int. J. Production Economics 140 (2012) 731–736

From this point of view and under the assumptions made, the
model proposed allows the understanding of the relationships
between quality, temperature and energy, addressing a possible
approach to the chain optimisation. Given the growing relevance
of the problem dealt with, it is possible to foresee several
improvements to the study itself, e.g., considering the effect of
transportation, the price decisions at the different stages, the
price-elasticity and the freshness-elasticity demand functions at
the various levels of the chain. Moreover, ‘‘mixed’’ processing
alternatives, which may be found in practise, should be consid-
ered, too, such as freezing–defrosting–cooking–freezing or fresh
delivery-freezing.

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alternative of FSC configurations considering, in particular, the Potatoes.
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The study showed how the energy effort produced in cooling and Zanoni, S., Zavanella, L., 2007. Single-vendor single-buyer with integrated trans-
port-inventory system: models and heuristics in the case of perishable goods.
maintaining products plays a relevant role in the FSC effective-
Computers & Industrial Engineering 52, 107–123.
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of the chain optimisation implies an increased attention for the Management: Non-Classical Views. CRC Press, Taylor & Francis, Boca Raton
sustainability of the chain considered, given the strict relationship (FL), pp. 73–95.
Zhang, G., Habenicht, W., Spie, W.E.L., 2003. Improving the structure of deep
linking energy and environmental concerns, thus leading to an frozen and chilled food chain with tabu search procedure. Journal of Food
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