Optimal wholesale facilities location within the fruit and vegetables supply chain with bimodal transportation options: An LP-MIP heuristic approach

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 on a national scale to facilitate the efficient transfer of food from production regions to consumption locations. It designs an optimal national wholesale or hub location network to serve food consumption markets through efficient connections with production sites. 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.