Recall costs balanced against spoilage control in Dutch custard

Abstract 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/batch to €36,171/batch from 57 to 135 h in the situation without quarantine and from €25,000/batch to €36,648/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. Key words: quality control; custard; failure cost; recall cost