Age-based vs. stock level control policies for a perishable inventory system

Age-based vs. stock level control policies for a perishable inventory system

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Article ID: iaor20021560
Country: Netherlands
Volume: 134
Issue: 2
Start Page Number: 309
End Page Number: 329
Publication Date: Oct 2001
Journal: European Journal of Operational Research
Authors: , ,
Keywords: deteriorating items
Abstract:

In this study, we investigate the impact of modified lotsize-reorder control policy for perishables which bases replenishment decisions on both the inventory level and the remaining lifetimes of items in stock. We derive the expressions for the key operating characteristics of a lost sales perishable inventory model, operating under the proposed age-based policy, and examine the sensitivity of the optimal policy parameters with respect to various system parameters. We compare the performance of the suggested policy to that of the classical (Q,r) type policy through a numerical study over a wide range of system parameters. Our findings indicate that the age-based policy is superior to the stock level policy for slow moving perishable inventory systems with high service levels.

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