A new class of stock-level dependent ordering policies for perishables with a short maximum shelf life

René Haijema

International Journal of Production Economics, 2013, vol. 143, issue 2, 434-439

Abstract: Many perishables such as fresh food and blood platelet concentrates are characterized by a short maximum shelf life. As demand is often highly uncertain the outdating and shortages figures can be very high, especially when frequent replenishment is not possible or inefficient due to fixed ordering cost. We present a new class of stock-level dependent ordering policies: the (s,S,q,Q) policy, which is a periodic review (s,S) policy with the order quantity restricted by a minimum (q) and maximum (Q). Optimal (weekday dependent) parameter values are derived by dynamic programming and simulation. The (s,S,q,Q) policy performs nearly optimal and improves the (s,S) policies in many cases by 4–25%.

Keywords: Inventory management; Perishable products; Food; Blood products; Markov decision problem (MDP); Dynamic programming; Simulation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:143:y:2013:i:2:p:434-439

DOI: 10.1016/j.ijpe.2011.05.021

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