The complexities of food supply chain impose enormous challenges to the processors. As compared to multinational food companies operating in Tanzania, local firms have been performing inefficiently or going out of the business because they could hardly withstand the competition. SCM in the food industry sector was studied in a qualitative survey covered 23 food processing firms in Tanzania, with the purposes of identifying the existing supply chain operation, knowledge of SCM concept and challenges facing the sector. The findings of this study suggest that a lot of efforts need to be addressed to ensure that food processors benefit from SCM concept. The understanding of SCM concept among the processors seems to be low, thus, hindering them from taping up the advantages that SCM concept offer. The sector still faces a number of factors which impede the firms to grow fast and compete in the global market. Such factors include technical know-how, research and development, capital, managerial and physical infrastructures.

Because demand for processed food products is uncertain, the processors face dilemma to satisfy their customers. The processors are unable to sell their products if demand turns out to be low. That is, some of the products will expire, the producer would have been better off by producing less. But if the processors choose to produce less to ensure that the entire products are sold, there will be an excess of demand if demand turns out to be high. In this case the processors would have been better off by choosing to produce large quantity. The dilemma is more experienced by SMEs food processors because they lack enough capital to acquire advanced technologies to assist in decision making. In this paper an attempt has been made to address the coordinating effects of ABD program in managing demand uncertainty. Fruits and vegetables drying factory has been focused as a case study. Theoretical expressions supported by explanatory mathematical equations have been offered. It is noted that the processor may achieve better decisions and managed demand uncertainty once they agree upon information sharing.

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