Jointly optimized replenishment and shipment consolidation decisions for perishable products

Jing Chen and Yifan Wu ()
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Jing Chen: Shanghai International Studies University
Yifan Wu: East China University of Science and Technology

Operational Research, 2025, vol. 25, issue 4, No 24, 59 pages

Abstract: Abstract Online shopping for perishable products, such as food and flowers, has become increasingly popular. However, the high costs associated with cold chain facilities and equipment have led to elevated operating expenses for CDCs handling perishable products. To achieve more cost-effective replenishment and transportation per unit product, this paper innovatively considers both Poisson demand and the lowest shipping quality requirements of perishable products to jointly optimize replenishment and shipment consolidation decisions from the perspective of a CDC. By formulating and analyzing a stochastic model using Renewal Reward Theory, this study identifies conditions under which a CDC should avoid replenishing in advance and/or adopting a time-based shipment consolidation strategy. It derives optimal expressions of the replenishment order-up-to-level and the shipment consolidation time, and explores their intrinsic relationships. This paper also analyzes how changes in cost structure, demand flow and storage duration of perishable products influence the optimal operational forms of CDC. The study has made a surprising discovery: unlike the operation of CDCs for regular products, CDCs handling perishable products should only adopt a shipment consolidation strategy rather than replenishment in advance in most cases. In rare cases, CDCs handling perishable goods should replenish in advance and adopt a shipment consolidation strategy simultaneously. In addition, recognizing that preservation measures can slow the decay of perishable products, the paper extends the model to jointly optimize replenishment, shipment consolidation, and freshness-keeping efforts. It uncovers the intrinsic relationships between these three decisions, demonstrates cost savings achieved through appropriate freshness-keeping investments, and indicate that inputting freshness-keeping effort can delay the process by which CDC adjusts its optimal operational form in response to cost structure, demand rate, and storage duration of perishable products.

Keywords: Shipment consolidation; Perishable products; Replenishment in advance; Freshness-keeping effort; Joint optimization (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12351-025-00979-1

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