A Short Food Supply Chain Under Demand Uncertainty – Optimization Approach Based On Simulation

Abstract:

Issues related to the creation and functioning of a short food supply chain are interesting from many points of view. First of all, a short supply chain can implement the demands of sustainable development, while providing better quality and cheaper products. At the same time, the question arises as to how to ensure the competitiveness of such a chain, and how to indicate which solutions are the most optimal from the point of view of achieving economic benefits, including profit of the producers creating such a structure. Secondly, such solutions allow for fairer remuneration of producers and participants in the chain, and at the same time the diversity and multiplicity of distribution channels allow for diversification of undertaken activities and for the elimination of risks. In a different situation related, for example, to operating within the network trade, the negotiating and competitive position of entities is small, therefore, these new market structures should be supported going forward and the benefits they bring should be highlighted. At the same time, managing such a chain is a challenge, but its simplified structure and the small number of links make it possible to increase the efficiency of the chain and the quality of the supplied products. The presented scenario method, with the use of computer simulation, is to show the possibilities of making more optimal decisions and to indicate how to achieve greater economic benefits in such a type of supply chains.  The results of the tests show that depending on the market served by the SFSC and adopted strategy, farmers' profits are changing, which may have an impact on the further development of such a concept in the future.