Towards a More Resilient and Cost-efficient Fresh Agri-food Supply Chain: A Collaborative Optimization via System Dynamics Methodology

In recent years, extreme weather events and pest/disease issues have made the resilience of the Agri-food supply chain a focus of social concern. Enterprises typically adopt two primary strategies to enhance the supply chain’s resilience, namely maintaining high inventory levels and improving logistics timeliness. The former, particularly through the implementation of the safety stock strategy, appears more feasible in the short term but incurs significant costs, especially for Agri-food. Therefore, striking a balance between resilience and cost efficiency is essential. This paper proposes a system dynamics model to collaboratively optimize resilience and holding costs in a three-level Agri-food supply chain. Using demand fulfillment rate as a resilience indicator, six simulation scenarios with varying inventory and transportation time configurations are designed. The dynamic impacts of these factors on both costs and resilience are analyzed. Optimization is performed using the Powell hill climbing algorithm in Vensim® DSS to adjust the safety stock strategy. Results show that: Reducing distributors’ transport time enhances resilience more, but at higher costs; increasing the inventory levels of retailers and distributors is more effective in improving resilience, though also accompanied by increased costs; Collaborative optimization among supply chain members can maximize both resilience and cost efficiency.