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Distribution of direct recall costs along the milk chain

  • A.G.J. Velthuis

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

  • M. Meuwissen

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

  • R.B.M. Huirne

    (Department of Business Economics, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, The Netherlands)

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    The relation between time and the direct recall costs of one batch of milk was investigated in this study. We developed a Monte Carlo simulation model of a farm-to-consumer supply chain associated with one batch of milk of 150,000 kilograms. The direct recall costs of recalling a batch are less than €100,000 in the first 16 hours after the milk has been collected from the farms, but the costs increase rapidly to more than €140,000. With this study, we showed that a modeling approach can give insight into the relation between recall costs and time, and it can support the development of monitoring schemes at the chain level. [EconLit citations: D210, Q180]. © 2009 Wiley Periodicals, Inc.

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    File URL: http://hdl.handle.net/10.1002/agr.20220
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    Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

    Volume (Year): 25 (2009)
    Issue (Month): 4 ()
    Pages: 466-479

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    Handle: RePEc:wly:agribz:v:25:y:2009:i:4:p:466-479
    Contact details of provider: Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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    1. Meuwissen, Miranda P.M. & Velthuis, Annet G.J. & Hogeveen, Henk & Huirne, Ruud B.M., 2003. "Traceability And Certification In Meat Supply Chains," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 21(2).
    2. Gregg A. Jarrell & Sam Peltzman, 1984. "The Impact of Product Recalls on the Wealth of Sellers," University of Chicago - George G. Stigler Center for Study of Economy and State 33, Chicago - Center for Study of Economy and State.
    3. Michael R. Thomsen & Andrew M. McKenzie, 2001. "Market Incentives for Safe Foods: An Examination of Shareholder Losses from Meat and Poultry Recalls," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 526-538.
    4. Skees, Jerry R. & Botts, Aleta & Zeuli, Kimberly A., 2001. "The Potential For Recall Insurance To Improve Food Safety," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(01).
    5. Ratapol Teratanavat & Victoria Salin & Neal H. Hooker, 2005. "Recall event timing: Measures of managerial performance in U.S. meat and poultry plants," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 351-373.
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