Stock-level dependent ordering of perishables: A comparison of hybrid base-stock and constant order policies

René Haijema and Stefan Minner

International Journal of Production Economics, 2016, vol. 181, issue PA, 215-225

Abstract: In practice, traditional stock-level dependent policies, like base-stock policies (BSP) and constant order policies (COP), are commonly used for replenishing inventories of perishable products at retailers. These policies are preferred for being easy to implement: they only require information on the total number of products in stock, but not differentiated by their age. In this paper, we analyze a number of new and existing hybrid BSP-COP policies. These policies have different complexities, but, so far, they have not been systematically compared with respect to their performance. By simulation-based optimization, the parameter values of the policies are determined. For this purpose, search ranges for the parameter values are provided. Based on an extensive set of experiments, insights are gained on when to apply which policy. The results show that two newly proposed enhancements of traditional base-stock policies, in particular, perform well and can be recommended for practical implementation.

Keywords: Perishable Inventory Management; Food Waste; Base-Stock Policy; Constant Order Policy; Heuristics; Simulation-based Optimization; Stochastic Dynamic Programming (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:181:y:2016:i:pa:p:215-225

DOI: 10.1016/j.ijpe.2015.10.013

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