A rolling horizon framework for supplier selection and order allocation: a case study on smallholder agricultural supply chain

Abstract In the short-food supply chain, planning the orders that the retailer places with the farmer is essential to ensure the satisfaction of the clients and the minimization of the costs for the retailer. Some of these retailers face a distinct set of challenges that, to the best of our knowledge, we are the first to tailor a model for. We integrate a mathematical model within a rolling horizon framework to address the supplier selection and order allocation problem, accounting for dynamic demand, production, and inventory capacities, as well as unit purchasing, ordering, and holding costs. Additionally, we perform a sensitivity analysis to understand the behavior of the model. The model is able to generate an ordering schedule given the demand of the clients and different parameters of suppliers. When integrated into the rolling horizon framework, the model could adapt to new information and modify previously planned, ordered, stored, and delivered quantities to meet the demand of the clients with minimal costs. When tested on instances of thirty suppliers with planning windows of length fifty time periods, the model had an average execution time of 3.5 seconds which we deemed acceptable.