Periodic review inventory-control for perishable products under service-level constraints

Periodic review inventory-control for perishable products under service-level constraints

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Article ID: iaor20106041
Volume: 32
Issue: 4
Start Page Number: 979
End Page Number: 996
Publication Date: Sep 2010
Journal: OR Spectrum
Authors: ,
Keywords: retailing
Abstract:

Food retail inventory management faces major challenges by uncertain demand, perishability, and high customer service level requirements. In this paper, we present a method to determine dynamic order quantities for perishable products with limited shelf-life, positive lead time, FIFO or LIFO issuing policy, and multiple service level constraints. In a numerical study, we illustrate the superiority of the proposed method over commonly suggested order-up-to-policies. We show that a constant-order policy might provide good results under stationary demand, short shelf-life, and LIFO inventory depletion.

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