Customer service: The distribution of seasonal food products under risk

This paper addresses important logistical considerations in the distribution of a seasonal food product. While continued attempts have been made to maintain high levels of customer service within the food industry. The degree of uncertainty in the distribution channel itself often undermines the efforts of management to procure adequate stock of products during the peak demand season. In this paper, the authors develop a stochastic dynamic programming formulation which may serve as a decision-support tool for managers faced with procuring products in a distribution channel in which receipt quantities are probabilistic. The paper provides numerical results, supporting the intuitive idea that expected costs and the length of the required planning horizon are inversely proportional to the level of uncertainty in the distribution channel.