Research On The Production, Quality And Safety In Food Supply Chain

Food as a necessity is very important for people’s lives. How to ensure the adequate food supply and the food safety is a key issue for the food supply chain. Food as one kind of commodities has many special characteristics, such as one kind of raw materials can be used to produce a variety of products, or one kind of products is made by a variety of raw materials, at the same time, these raw materials and products are perishable (i.e. short shelf life). Because of these characteristics, the production of food faces many challenges. When the demands for different products are uncertain, companies cannot effectively make the production, ordering and other decisions due to the perishable property, so the production quantity does not match the demand, and result in the expired waste or backorder problem. So to help companies develop a reasonable perishable inventory strategy has been an issue of great concern to theorists.Another special nature of food is that the safety level of food product cannot be observable or immediately available for the customer. Some properties, like appearance, taste, can be directly obtained by collecting information before buying or by experience after purchase. However, the impact of chemical residues, food additives and other safety properties on people’s healthy is difficult or impossible to aware immediately even after the consumption. So the transaction can only base on trust. But the information asymmetry on food safety property between producers and consumers often leads to moral hazard of producers. To solve this problem, the government and the business community find a’number of methods. Traceability as a new mean is being widely used in the food supply chain. Therefore, the research on the impact of supply chain members’action on the food safety when traceability exists has very important significance.Based on these backgrounds, the paper uses optimization theory and game theory to study the operation management decision in food supply chain. The main contents are as follows:Firstly, we introduce the research background of the perishable product inventory issues and the food safety issues. Then, we point out the purpose and significance of this study. Meanwhile, we review the literatures about these two problems and present the insufficiencies of these researches. According to these analyses, we determine the content of this paper.According to the previous research contents, we first study the ordering policy of raw material for co-products with different shelf lives. This research is based on the practical operation management problems faced by Yurun Group, which is the large food production and processing enterprises in China. Compared with other types of businesses, such food production and processing enterprises has two special characteristics:first, raw material can be split to produce multiple types of products; second, the products have different shelf lives. Therefore, enterprises must make the procurement decision of raw material carefully to minimize inventory costs and to meet the customer demand for different products. However, companies operating in the real world often lack effective tools to assist enterprises to make scientific decisions, resulting in the production of and demand does not match, the product expire waste and other issues. This paper will base on the characteristics of such enterprises and practical issues to study firm’s optimal ordering policy of raw materials and the corresponding management insights. It aims to guide business decisions and improve the competitiveness of enterprises in the market.The raw material ordering policy issues is only related to the firm’s internal production decision, but the food safety issues is influenced by the decisions of the various participants in the supply chain. So we study the impact of each participant’s decision on food safety in food supply chain. We assume that there is a traceability system between a supplier and a manufacturer in a food supply chain. When the manufacturer uses trade credit or inspection, we can figure out the optimal decision. By comparing these two models, we can find that the influence of traceability on the optimal contract and decision is different in these two mechanisms and the willingness of using traceability by the manufacturer is also different.There are many links from food production to the final sale, and the process in each link may affect the food safety. In the case of asymmetric information, the impact of production process on the food safety cannot be observed, which provides opportunities for firms to cut corners and results in double moral hazard problem. Therefore, we study the external cost sharing contract by using the information provided by the traceability system to affect the behaviors of the supply chain members, and finally to improve food safety.In conclusion and outlook section, we summarize the research results, and point out the future research directions.In summary, an adequate safe food supply is important for consumers. We do some exploratory research on food supply chain inventory problems and food safety issues in this paper, and get some useful results to guide the practices of the enterprise. So it has a positive effect on the firm’s performance and food safety.