Waste consumption of bio-degradable products through a secondary supply chain

Food and agriculture organization estimates that 33% of the food is wasted in the world. It is essential to optimize the food supply chains to mitigate the economic and environmental impacts of this large amount of food waste. The targets of food waste reduction can be achieved by increasing lifetime and consuming the inevitably produced food waste for producing secondary products. This research proposes a primary and secondary supply chain model, where effective preservation policy increases lifetime of food items, and the yet produced food waste is converted into secondary products. This way, the waste from the system is removed and it is converted into a sustainable zero-waste system. A nonlinear mathematical model is proposed to set the objective function of the research, which best determines the production plan, inventory schedule and investment in preservation technology while maximizing profit. The model is solved using the Kuhn-Tucker method, and the model optimality is obtained by proposing an algorithm. Numerical analysis is carried out to validate the presented model, and sensitivity analysis is performed to demonstrate the effects of variation in cost parameters on the profit. The outcome of the analysis shows that the proposed secondary supply chain increases profit by 35% and the preservation policy increases the profit by 17.9%. Besides, the proposed policies minimize and remove the food waste from system. Managerial implications are provided for the practitioners to apply the proposed model in food supply chains.