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

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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%.
Original languageEnglish
Pages (from-to)434-439
JournalInternational Journal of Production Economics
Volume143
Issue number2
DOIs
Publication statusPublished - 2013

Keywords

  • inventory

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