An integrated single-vendor multi-buyer production-inventory policy for food products incorporating quality degradation

Gusti Fauza, Yousef Amer, Sang-Heon Lee and Hari Prasetyo

International Journal of Production Economics, 2016, vol. 182, issue C, 409-417

Abstract: Existing studies on models of perishable inventory policy are mostly established according to the base assumption that a fraction of items stocked depletes instantaneously over time due to direct spoilage. For food products over the storage time the quality does degrade, however, the quantity of items typically remains constant. Therefore, this research proposes an integrated approach for addressing food inventory policy for managing the flow of a food product incorporating different quality characteristics, in a supply chain system, comprising a single vendor and multiple buyers (SVMB). The kinetic model is applied to represent the quality degradation of the raw material at the vendor (manufacturer), while the shelf-life based pricing is adopted to characterise the value degradation of finished goods at the buyers (retailers). A mathematical model representing the considered system is established to maximise the joint profit of the whole system. It is achieved by coordinating the manufacturing cycle and the inbound-outbound delivery frequencies of materials over the manufacturing cycle. The numerical test shows that the proposed model returns a better benefit compared to the benchmark model.

Keywords: Perishable inventory; Quality loss; Shelf-life; Supply chain; Value degradation (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527316302390
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:182:y:2016:i:c:p:409-417

DOI: 10.1016/j.ijpe.2016.09.009

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().