Simulation based approach for inventory management of packaged milk at an unorganized Indian retailer: A case study

Nishit Satish Mehta, Anand Abraham () and K. Nageswara Reddy
Additional contact information
Nishit Satish Mehta: Indian Institute of Technology Kharagpur, Department of Industrial and Systems Engineering
Anand Abraham: Indian Institute of Technology Kharagpur, Department of Industrial and Systems Engineering
K. Nageswara Reddy: Operations Research Scientist

A chapter in Proceedings of the International Conference on Operations & Supply Chain Management 2025 (ICOSCM 2025), 2025, pp 48-60 from Springer

Abstract: Abstract Managing inventory for perishable goods such as milk is a complex task, particularly for small unorganized retailers who handle multiple products and lack the resources to closely monitor each item or employ costly optimization tools. Such retailers typically relay on simple thumb rules or fixed-order policies to manage stock. This study develops a Discrete-Event Simulation (DES) model to replicate the daily operations of such a retailer managing multiple milk SKUs under demand uncertainty and product perishability. A Genetic Algorithm (GA) is then applied to optimize the parameters of a base-stock policy, aiming to improve ordering decisions. Results indicate that the GA-optimized policy yields marginally higher profitability and reduced lost sales compared to the traditional fixed-order approach. While the improvement is statistically significant, its magnitude remains modest, suggesting that the simple heuristics used by small retailers are relatively effective and continue to be practical for real-world supply chain operations.

Keywords: Inventory management; Genetic Algorithm (GA); fixed- order policy; based-stock policy; simulation-based optimization; perish- able goods; supply chain (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:advbcp:978-94-6463-914-8_5

Ordering information: This item can be ordered from
http://www.springer.com/9789464639148

DOI: 10.2991/978-94-6463-914-8_5

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().