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Effects of scale economies and production seasonality on optimal hub locations: the case of regional fresh produce aggregation

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  • Houtian Ge
  • Patrick Canning
  • Stephan Goetz
  • Agnes Perez

Abstract

Interest in supporting local and regional food systems is rising and food hubs have attracted considerable attention among Federal, State, and local policymakers. This study explores the problem of endogenous hub location in fresh produce value chains in the Northeastern United States. To overcome limitations in the literature, we incorporate the effects of economies of scale and production seasonality into our models. Three experimental models are designed to examine the effects of alternatively applying yearly, quarterly, and monthly data on model solutions. We explicitly assess how interactions of scale economies and seasonality influence the structure and spatial attributes of an optimal regional produce aggregation hub system. The three models generate marketed different solutions and in many respects they lead to different conclusions about developing local/regional supply chains. The monthly model allows for production seasonality and actual hub operation cycle frequency and thus leads to more efficient hub solution with rich policy implications.

Suggested Citation

  • Houtian Ge & Patrick Canning & Stephan Goetz & Agnes Perez, 2018. "Effects of scale economies and production seasonality on optimal hub locations: the case of regional fresh produce aggregation," Agricultural Economics, International Association of Agricultural Economists, vol. 49(2), pages 157-169, March.
    • Handle: RePEc:bla:agecon:v:49:y:2018:i:2:p:157-169
    DOI: 10.1111/agec.12405
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    Cited by:

    1. Ge, Houtian & Gomez, Miguel I. & Peters, Christian, 2022. "Assessment of the economic viability of grass-fed beef production in the Northeastern U.S," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322487, Agricultural and Applied Economics Association.
    2. Fernianda Rahayu Hermiatin & Yuanita Handayati & Tomy Perdana & Dadan Wardhana, 2022. "Creating Food Value Chain Transformations through Regional Food Hubs: A Review Article," Sustainability, MDPI, vol. 14(13), pages 1-24, July.
    3. repec:ags:aaea22:335590 is not listed on IDEAS
    4. Gary Bosworth & Koen Salemink, 2021. "All hubs and no spokes? Exploring the potential of hubs to sustain rural and regional development," Local Economy, London South Bank University, vol. 36(7-8), pages 543-550, November.
    5. repec:ags:aaea22:335742 is not listed on IDEAS
    6. repec:ags:aaea22:335580 is not listed on IDEAS
    7. Ge, Houtian & Goetz, Stephan J. & Cleary, Rebecca & Yi, Jing & Gómez, Miguel I., 2022. "Facility locations in the fresh produce supply chain: An integration of optimization and empirical methods," International Journal of Production Economics, Elsevier, vol. 249(C).
    8. Li, Yantong & Chu, Feng & Côté, Jean-François & Coelho, Leandro C. & Chu, Chengbin, 2020. "The multi-plant perishable food production routing with packaging consideration," International Journal of Production Economics, Elsevier, vol. 221(C).
    9. Efryta Wulan Anggraeni & Yuanita Handayati & Santi Novani, 2022. "Improving Local Food Systems through the Coordination of Agriculture Supply Chain Actors," Sustainability, MDPI, vol. 14(6), pages 1-19, March.
    10. Houtian Ge & Miguel Gómez & Christian Peters, 2022. "Modeling and optimizing the beef supply chain in the Northeastern U.S," Agricultural Economics, International Association of Agricultural Economists, vol. 53(5), pages 702-718, September.
    11. Ge, Houtian & Goetz, Stephan & Canning, Patrick & Perez, Agnes, 2018. "Optimal locations of fresh produce aggregation facilities in the United States with scale economies," International Journal of Production Economics, Elsevier, vol. 197(C), pages 143-157.

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