Milk Supply Chain Management Game for Waste Reduction

Abstract

In the Japanese milk supply chain, a huge quantity of milk is wasted every year. This wastage is a combination of several factors, including a decreasing trend of milk consumption, opposite seasonal tendencies of milk supply and demand, purchasing behavior of consumers, and current business practices in the milk supply chain. Each milk package has a best-before date of approximately 15 days after production, after which retailers cannot sell the package. Packaged milk cannot be delivered to any supermarket after the corresponding sell-by date, which is set to be a third of the period between its production and best-before date. Furthermore, any milk packages with a specific best-before date may no longer be delivered if at least one package with a further best-before date has been shipped. The effects of such factors on wastage are mediated by various interacting decisions made by stakeholders in the milk supply chain. As a result, the mechanism of how milk wastage occurs, and devising effective countermeasures to limit the waste, cannot be easily understood. Thus, to investigate the mechanism and to test the effectiveness of potential countermeasures to limit the waste, we have developed an original simulation game that simulates the manner in which a milk supply chain operates as a result of the interacting decisions made by its stakeholders. In the resulting game, dairy farmers and consumers are modeled by computer agents and the roles of milk manufacturers and supermarkets are taken by human players.