Computing Replenishment Cycle Policy Parameters for a Perishable Item

Roberto Rossi, S Armagan Tarim, Brahim Hnich, Steven Prestwich

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In many industrial environments there is a significant class of problems for which the perishable nature of the inventory cannot be ignored in developing replenishment order plans. Food is the most salient example of a perishable inventory item. In this work, we consider the periodic-review, single-location, single-product production/inventory control problem under non-stationary stochastic demand and service level constraints. The product we consider can be held in stock for a limited amount of time after which it expires and it must be disposed of at a cost. In addition to wastage costs, our cost structure comprises fixed and unit variable ordering costs, and inventory holding costs. We propose an easy-to-implement replenishment cycle
inventory control policy that yields at most 2N control parameters, where N is the number of periods in our planning horizon. We also show, on a simple numerical example, the improvement brought by this policy over two other simpler inventory control rules of common use.
Original languageEnglish
Title of host publicationProceedings of the 24th MEC-EurOPT-2010, June 23-26, 2010, Izmir, Turkey
EditorsRefail Kasımbeyli, Cemali Dinçer, Selin Özpeynirci, Leonidas Sakalauskas
Place of PublicationIzmir, Turkey
PublisherVGTU Publishing House “Technika”
Pages241-247
Number of pages7
ISBN (Print)978-9955-28-597-7
Publication statusPublished - 2010
Event24th Mini EURO Conference on Continuous Optimization and Information-Based Technologies in the Financial Sector (MEC EurOPT 2010) - Izmir, Turkey
Duration: 23 Jun 201026 Jun 2010

Conference

Conference24th Mini EURO Conference on Continuous Optimization and Information-Based Technologies in the Financial Sector (MEC EurOPT 2010)
Country/TerritoryTurkey
CityIzmir
Period23/06/1026/06/10

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