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Modeling Strategies to Improve the Terminal Market Operational Efficiency

Author

Listed:
  • Xu, Jiaming
  • Ge, Houtian
  • Gomez, Miguel I.
  • Park, Kristen
  • Long, Abby

Abstract

Terminal produce markets serve as critical U.S. supply chain hubs for fresh produce aggregation and distribution. However, inefficiencies and aging infrastructure heighten operational costs and diminish resilience. This study presents a computational optimization model employing Mixed-Integer Linear Programming (MILP) to establish optimal capacity and assembly patterns, minimizing costs subject to demand fulfillment. The model integrates constraints including transportation distances, product shrinkage, and economies of scale. Leveraging monthly domestic production and import data, cost-effective aggregation strategies are identified, with analysis focused on Boston and Detroit. Results demonstrate localized average cost minima at specific throughput levels, yielding actionable insights for market managers and policymakers to improve efficiency. The research furnishes a robust tool for optimizing terminal market performance in the face of logistical and economic uncertainties.

Suggested Citation

  • Xu, Jiaming & Ge, Houtian & Gomez, Miguel I. & Park, Kristen & Long, Abby, 2025. "Modeling Strategies to Improve the Terminal Market Operational Efficiency," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360607, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360607
    DOI: 10.22004/ag.econ.360607
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    References listed on IDEAS

    as
    1. 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.
    2. Volpe, Richard & Leibtag, Ephraim S. & Roeger, Edward, 2013. "How Transport Costs Affect Fresh Fruit and Vegetable Prices," Economic Research Report 161355, United States Department of Agriculture, Economic Research Service.
    3. 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.
    4. Milton Madison, 2005. "Technological Change and Economies of Scale in U.S. Poultry Processing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 116-129.
    5. 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.
    6. Dupont, Lionel, 2008. "Branch and bound algorithm for a facility location problem with concave site dependent costs," International Journal of Production Economics, Elsevier, vol. 112(1), pages 245-254, March.
    7. Broek, John v.d. & Schutz, Peter & Stougie, Leen & Tomasgard, Asgeir, 2006. "Location of slaughterhouses under economies of scale," European Journal of Operational Research, Elsevier, vol. 175(2), pages 740-750, December.
    8. 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.
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