Multi-store food retailing problem with outsourcing purchase operation: a case study in Japan

In this paper, we deal with the multi‐store food retailing problem with outsourcing purchase operation, which is modelled as a two‐level formulation, and we assume that the food retailer which is a primal decision maker has several stores in Japan and contracts with a distributer to purchase farm products to cope with Japanese customers' behaviour. That is, the food retailer deals with vegetables and fruits which are purchased from the distributer; the distributer buys vegetables and fruits ordered from the food retailer at the central wholesale markets in several cities, and transports them by truck from each of the central wholesaler markets to the food retailer's storehouses. Due to optimisation of transportation of the farm products, the multi‐store food retailing problem with outsourcing purchase operation is formally formulated as a three‐level linear programming problem. We solve the multi‐store problem together with the underlying single decision maker problem and outsourcing problem with a single store in order to demonstrate the solution characteristics of the multi‐store problem.