Cost Optimisation of Supply Chains in the Food Industry:
Cost Function Modelling
Author:Ion Popa, Sorina-Geanina Stănescu, Anișoara Duică, Elisabeta Ilona Molnar
and Mircea Constantin Duică
JEL:M11, M21
DOI:10.24818/EA/2025/69/293
Keywords:supply chain, cost, efficiency, food logistics, cost function
Abstract:
The food industry faces complex challenges in managing supply chains, significantly affecting operational performance and costs. This paper explores the critical factors influencing the efficiency of food supply chains, such as product perishability, seasonality, climate change, and high logistics costs. The study uses an applied approach based on modelling a cost function that integrates the main components of supply chain expenses — procurement, transportation, warehousing, production and distribution — and how they are affected by industry-specific challenges. The proposed cost function allows for assessing the impact of these variables on total costs and identifying critical areas for optimisation. The results obtained demonstrate that monitoring logistical conditions, adjusting stocks based on seasonal forecasts and optimising transport routes are essential measures to reduce losses and increase the competitiveness of companies in the food industry. The study's applied impact consists of providing a practical cost optimisation tool applicable to manufacturers and distributors. The conclusions emphasise the importance of an integrated approach to risk and cost management in the food industry, providing recommendations for sustainable practices and strategies to increase long-term competitiveness.