Recall costs balanced against spoilage control in Dutch custard.
The relation between the moment at which a recall of Dutch custard is initiated and the direct costs of this recall was investigated. A simulation model of the custard supply chain was developed to compare scenarios with and without a quarantine of 48 h at the storage of the production plant. The model consists of 3 parts: 1) the distribution of a 24,000-L batch of custard over the supply chain over time is simulated; 2) the time to detect spoilage bacteria with a recontamination test procedure is simulated; and 3) the direct recall costs of custard over the different parts of the supply chain are calculated. Direct recall costs increase from about 25,000 euros/batch to 36,171 euros/batch from 57 to 135 h in the situation without quarantine and from 25,000 euros/batch to 36,648 euros/batch from 123 h to 163 h for the situation with quarantine. Then costs decrease because more and more custard is at the consumer level and only 0.13% of the consumers will ask for a refund. With low true contamination probabilities quarantine is not profitable, but at later detection moments with high probabilities it is. We conclude that a simulation model is a helpful tool to evaluate the efficiency of risk management strategies like end product testing and a quarantine situation.
Velthuis
A G J
AG
Business Economics, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, The Netherlands. annet.velthuis@wur.nl
Reij
M W
MW
Baritakis
K
K
Dang
M
M
van Wagenberg
C P A
CP
D003365:Costs and Cost Analysis / Q000191:economics; D003611:Dairy Products / Q000191:economics* / Q000592:standards; D005506:Food Contamination / Q000191:economics / Q000517:prevention & control; D005511:Food Handling / Q000191:economics / Q000592:standards; D005519:Food Preservation / Q000191:economics / Q000592:standards; D018803:Models, Economic; D009426:Netherlands; D011336:Probability; D057051:Product Recalls and Withdrawals