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Abstract
Consumer demand for regionally-produced food has increased dramatically in the past decade, in response to concerns over food safety and quality, as well as the serious environmental, economic, and social equity issues that pervade the modern industrial food supply system. As demand grows, distributors of regionally-produced food (i.e., food hubs) face many challenges in their efforts to scale up, particularly with supply chain management. They must find ways to operate more efficiently without undermining their support for the regional farming community. In this paper we describe a multi-agent simulation model of a theoretical regional food system in which multiple farmer-agents produce food, negotiate with a regional food-hub-agent, and try to sell their food at the best possible price. Using this model, we compare the effects of various food hub supplier selection policies on system outcomes, in terms of food hub profitability, the cost of quality, transaction costs, the number of farmers required to satisfy demand, and the size distribution of these farmers. Results suggest that the food hub's selection policy significantly impacts long-term system performance.
Keywords
Multi-agent simulation, supply chain management, regional food system, supplier selection policies
1. Introduction
Demand for regionally-produced food has increased tremendously in the past decade as consumers have become increasingly aware of the benefits of supporting regional food systems. Consumers' reasons for buying regional food vary widely. Typical reasons include: a desire to save money on groceries, a belief that regional food is fresher, safer, and/or more nutritious than conventionally-produced food, concerns about the environment and the treatment of farm workers, and a desire to support the local economy and establish connections with the people who produced their food [1-3]. This demand growth has been a boon to small- and medium-scale farmers, who can benefit from higher prices and fewer restrictions on volume, compared with sales through mainstream distributors. However, they have also begun to discover that new market and distribution channels will be necessary to efficiently and effectively support this demand, while continuing to support the values that consumers seek [4]. In particular, many farmers are challenged by a lack of distribution infrastructure which would provide them with better access to retail, institutional, and commercial food service markets where demand for regional food is substantial [5].
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