Contract-based coordination of multi-stage fresh product supply chains with the aim of reducing food waste

• Applicant: Professorin Dr. Sandra Transchel
• Subject Area: Accounting and Finance
• Term: since 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 437674808

The problem of food waste is increasingly coming to the fore in politics, the media, as well as science and research. In Germany, it is estimated that about 18 million tons of food end up in waste every year. However, food waste is not a problem of a single company, but arises along the entire value chain. Various studies have identified that, in particular, inefficient cross-company planning processes caused by opportunistic decision-making behavior and collaboration obstacles of individual companies or an insufficient flow of information in the supply chain as triggers of food waste. It turns out that it is not sufficient to optimize the planning processes of individual companies independently of each other, but rather to focus on the coordination of cross-company planning and decision-making processes. A major challenge in the cross-company coordination of decision-making is that the members of the supply chain are legally and economically independent companies that first and foremost pursue their own - often conflicting - goals. A common mechanism for coordinating cross-company decisions is the contract.There is little scientific knowledge about the extent to which contracts between actors in food supply chains (e.g. retailers and food producers) affect the quantity and distribution of food waste in the supply chain by influencing individual company planning processes (production, inventory and order planning).The primary objective of this research is to show to what extent contracts between companies in food supply chains influence the operational planning behavior of each company and thus indirectly influence the amount and distribution of food waste throughout the supply chain. Different contract models for different market power structures (buyer-dominated, supplier-dominated and equal power relations) will be investigated. Furthermore, since availability of information is a key factor for the efficiency of contracts, it will be investigated to what extent a better transfer of real-time information in the supply chain can contribute to a reduction of food waste.To achieve this goal, mathematical models are to be developed (and analytically and numerically analyzed) which structurally map the two-stage hierarchical planning structure of the problem, consisting of the contract mechanism on the first level and the operative production, ordering and inventory behavior of all actors on the second level. For this, the concept of hierarchical planning with reactive anticipation of Schneeweiß (2003) as a basic structure is to be used as a basis, which on the first level analyses models of contract theory (principal agent theory and game theory) integrated with stochastic planning models of supply chain management on the second level.

• DFG Programme: Research Grants