Article ID: | iaor20106041 |
Volume: | 32 |
Issue: | 4 |
Start Page Number: | 979 |
End Page Number: | 996 |
Publication Date: | Sep 2010 |
Journal: | OR Spectrum |
Authors: | Minner Stefan, Transchel Sandra |
Keywords: | retailing |
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.