Periodic review inventory-control for perishable products under service-level constraints OR Spectrum September 2010, Volume 32, Issue 4, pp 979–996 | Cite as Stefan Minner (1) Email author (
[email protected]) Sandra Transchel (2) 1. Faculty of Business, Economics and Statistics, University of Vienna, Vienna, Austria 2. Smeal College of Business, The Pennsylvania State University, University Park, USA Regular Aticle First Online: 18 February 2010 1.2k Downloads 37 Citations
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.
Keywords Inventory Perishable products Service level This is a preview of subscription content, log in to check access
Preview Unable to display preview. Download preview PDF. Unable to display preview. Download preview PDF.
References Bao J, Lee C, Lee LH (2007) The value of electronic marketplace in a perishable product inventory system with auto-correlated demand. OR Spectrum 29: 627–641 CrossRef (https://doi.org/10.1007/s00291-006-0073-0) Google Scholar (http://scholar.google.com/scholar_lookup? title=The%20value%20of%20electronic%20marketplace%20in%20a%20perishable%20product%20inventory%20system%20with%20autocorrelated%20demand&author=J.%20Bao&author=C.%20Lee&author=LH.%20Lee&journal=OR%20Spectrum&volume=29&pages=627641&publication_year=2007) Brodheim E, Derman C, Prastacos GP (1975) On the evaluation of a class of inventory policies for perishable products such as blood. Manag Sci 22: 1320–1325 CrossRef (https://doi.org/10.1287/mnsc.21.11.1320) Google Scholar (http://scholar.google.com/scholar_lookup? title=On%20the%20evaluation%20of%20a%20class%20of%20inventory%20policies%20for%20perishable%20products%20such%20as%20blood &author=E.%20Brodheim&author=C.%20Derman&author=GP.%20Prastacos&journal=Manag%20Sci&volume=22&pages=13201325&publication_year=1975) Broekmeulen RACM, van Donselaar KH (2009) A heuristic to manage perishable inventory with batch ordering, positive lead-times, and timevarying demand. Comput Oper Res 36: 3013–3018 CrossRef (https://doi.org/10.1016/j.cor.2009.01.017) Google Scholar (http://scholar.google.com/scholar_lookup? title=A%20heuristic%20to%20manage%20perishable%20inventory%20with%20batch%20ordering%2C%20positive%20leadtimes%2C%20and%20timevarying%20demand&author=RACM.%20Broekmeulen&author=KH.%20Donselaar&journal=Comput%20Oper%20Res&volume=36&pages=30133018&publication_year=2009) Chen J, Lin DKJ, Thomas DJ (2003) On the single item fill rate for a finite horizon. Oper Res Lett 31: 119–123 CrossRef (https://doi.org/10.1016/S0167-6377(02)00233-X) Google Scholar (http://scholar.google.com/scholar_lookup? title=On%20the%20single%20item%20fill%20rate%20for%20a%20finite%20horizon&author=J.%20Chen&author=DKJ.%20Lin&author=DJ.%20T homas&journal=Oper%20Res%20Lett&volume=31&pages=119-123&publication_year=2003) Cohen MA (1976) Analysis of single critical number policies in perishable inventory theory. Oper Res 24: 726–741 CrossRef (https://doi.org/10.1287/opre.24.4.726) Google Scholar (http://scholar.google.com/scholar_lookup? title=Analysis%20of%20single%20critical%20number%20policies%20in%20perishable%20inventory%20theory&author=MA.%20Cohen&journal =Oper%20Res&volume=24&pages=726-741&publication_year=1976) Dawson J (2004) Food retailing, wholesaling and catering. In: Bourlakis MA, Weightman PWH (eds) Food supply chain management. Blackwell, Oxford, pp 116–135 Google Scholar (http://scholar.google.com/scholar_lookup? title=Food%20retailing%2C%20wholesaling%20and%20catering&author=J.%20Dawson&pages=116-135&publication_year=2004) Diks EB, de Kok AG, Lagodimos AG (1996) Multi echelon systems: a service measure perspective. Eur J Oper Res 95: 241–263 CrossRef (https://doi.org/10.1016/S0377-2217(96)00120-8) Google Scholar (http://scholar.google.com/scholar_lookup? title=Multi%20echelon%20systems%3A%20a%20service%20measure%20perspective&author=EB.%20Diks&author=AG.%20Kok&author=AG.%2 0Lagodimos&journal=Eur%20J%20Oper%20Res&volume=95&pages=241-263&publication_year=1996) Fries B (1975) Optimal ordering policy for a perishable commodity with fixed lifetime. Oper Res 23(1): 46–61 CrossRef (https://doi.org/10.1287/opre.23.1.46) Google Scholar (http://scholar.google.com/scholar_lookup? title=Optimal%20ordering%20policy%20for%20a%20perishable%20commodity%20with%20fixed%20lifetime&author=B.%20Fries&journal=Oper %20Res&volume=23&issue=1&pages=46-61&publication_year=1975) Goyal SK, Giri BC (2001) Recent trends in modeling of deteriorating inventory. Eur J Oper Res 134(1): 1–16 CrossRef (https://doi.org/10.1016/S0377-2217(00)00248-4) Google Scholar (http://scholar.google.com/scholar_lookup? title=Recent%20trends%20in%20modeling%20of%20deteriorating%20inventory&author=SK.%20Goyal&author=BC.%20Giri&journal=Eur%20J %20Oper%20Res&volume=134&issue=1&pages=1-16&publication_year=2001) Grocery Manufacturer Association (2008) 2008 Joint industry unsaleables report: the real causes and actionable solutions. http://www.gmabrands.com/publications/UnsaleablesFINAL091108.pdf (http://www.gmabrands.com/publications/UnsaleablesFINAL091108.pdf) Gruen TW, Corsten D, Bharadwaj S (2002) Retail out of stocks: a worldwide examination of extent, causes and consumer responses. Grocery Manufacturers of America, Washington, D.C. Google Scholar (http://scholar.google.com/scholar_lookup? title=Retail%20out%20of%20stocks%3A%20a%20worldwide%20examination%20of%20extent%2C%20causes%20and%20consumer%20response s&author=TW.%20Gruen&author=D.%20Corsten&author=S.%20Bharadwaj&publication_year=2002) Ishii H (1993) Perishable inventory problem with two types of customers and different selling prices. J Oper Res Soc Jpn 36(4): 199–205 Google Scholar (http://scholar.google.com/scholar_lookup? title=Perishable%20inventory%20problem%20with%20two%20types%20of%20customers%20and%20different%20selling%20prices&author=H.% 20Ishii&journal=J%20Oper%20Res%20Soc%20Jpn&volume=36&issue=4&pages=199-205&publication_year=1993) Kapalka BA, Katircioglu K, Puterman ML (1999) Retail inventory control with lost sales, service constraints, and fractional lead times. Prod Oper Manag 8(4): 393–408 Google Scholar (http://scholar.google.com/scholar_lookup? title=Retail%20inventory%20control%20with%20lost%20sales%2C%20service%20constraints%2C%20and%20fractional%20lead%20times&auth or=BA.%20Kapalka&author=K.%20Katircioglu&author=ML.%20Puterman&journal=Prod%20Oper%20Manag&volume=8&issue=4&pages=393408&publication_year=1999) Karaesmen I, Scheller-Wolf A, Deniz B (2008) Managing perishable and aging inventories: review and future research directions. In: Kempf K, Keskinocak P, Uzsoy R (eds) Handbook of production planning. Kluwer international series in operations research and management science. Kluwer, Dordrecht Google Scholar (https://scholar.google.com/scholar?q=Karaesmen%20I%2C%20SchellerWolf%20A%2C%20Deniz%20B%20%282008%29%20Managing%20perishable%20and%20aging%20inventories%3A%20review%20and%20fut ure%20research%20directions.%20In%3A%20Kempf%20K%2C%20Keskinocak%20P%2C%20Uzsoy%20R%20%28eds%29%20Handbook%20of %20production%20planning.%20Kluwer%20international%20series%20in%20operations%20research%20and%20management%20science.%20Kl uwer%2C%20Dordrecht) Law AM, Kelton WD (2000) Simulation modeling and analysis, 3rd edn. McGraw-Hill, New York Google Scholar (http://scholar.google.com/scholar_lookup? title=Simulation%20modeling%20and%20analysis&author=AM.%20Law&author=WD.%20Kelton&publication_year=2000) Lütke Entrup M (2005) Advanced planning for fresh food industries—integrating shelf-life into production planning. Physica, Heidelberg Google Scholar (http://scholar.google.com/scholar_lookup? title=Advanced%20planning%20for%20fresh%20food%20industries%E2%80%94integrating%20shelflife%20into%20production%20planning&author=M.%20L%C3%BCtke%20Entrup&publication_year=2005) Nahmias S (1982) Perishable inventory theory: a review. Oper Res 30: 680–708 CrossRef (https://doi.org/10.1287/opre.30.4.680) Google Scholar (http://scholar.google.com/scholar_lookup? title=Perishable%20inventory%20theory%3A%20a%20review&author=S.%20Nahmias&journal=Oper%20Res&volume=30&pages=680708&publication_year=1982) Nahmias S, Pierskalla W (1973) Optimal ordering policies for a product that perishes in two periods subject to stochastic demand. Nav Res Logist Q 20(2): 207–229 CrossRef (https://doi.org/10.1002/nav.3800200202) Google Scholar (http://scholar.google.com/scholar_lookup? title=Optimal%20ordering%20policies%20for%20a%20product%20that%20perishes%20in%20two%20periods%20subject%20to%20stochastic%2 0demand&author=S.%20Nahmias&author=W.%20Pierskalla&journal=Nav%20Res%20Logist%20Q&volume=20&issue=2&pages=207229&publication_year=1973) Nahmias S (1994) Demand estimation in lost sales inventory systems. Nav Res Logist 41(6): 739–757 CrossRef (https://doi.org/10.1002/1520-6750(199410)41%3A63.0.CO%3B2-A) Google Scholar (http://scholar.google.com/scholar_lookup? title=Demand%20estimation%20in%20lost%20sales%20inventory%20systems&author=S.%20Nahmias&journal=Nav%20Res%20Logist&volume= 41&issue=6&pages=739-757&publication_year=1994) Pierskalla WP, Roach C (1975) Optimal issuing policies for perishable inventory. Manag Sci 18(11): 603–614 CrossRef (https://doi.org/10.1287/mnsc.18.11.603) Google Scholar (http://scholar.google.com/scholar_lookup? title=Optimal%20issuing%20policies%20for%20perishable%20inventory&author=WP.%20Pierskalla&author=C.%20Roach&journal=Manag%20S ci&volume=18&issue=11&pages=603-614&publication_year=1975) Rafaat F (1991) Survey of literature on continuously deteriorating inventory models. J Oper Res Soc 42(1): 27–37 Google Scholar (http://scholar.google.com/scholar_lookup? title=Survey%20of%20literature%20on%20continuously%20deteriorating%20inventory%20models&author=F.%20Rafaat&journal=J%20Oper%20 Res%20Soc&volume=42&issue=1&pages=27-37&publication_year=1991) Smith SA, Agrawal N (2000) Management of multi-item inventory systems with demand substitution. Oper Res 48(1): 50–64 CrossRef (https://doi.org/10.1287/opre.48.1.50.12443) Google Scholar (http://scholar.google.com/scholar_lookup?title=Management%20of%20multiitem%20inventory%20systems%20with%20demand%20substitution&author=SA.%20Smith&author=N.%20Agrawal&journal=Oper%20Res&volum e=48&issue=1&pages=50-64&publication_year=2000) Silver EA, Pyke DF, Peterson R (1998) Inventory management and production planning and scheduling, 3rd edn. Wiley, New York Google Scholar (http://scholar.google.com/scholar_lookup? title=Inventory%20management%20and%20production%20planning%20and%20scheduling&author=EA.%20Silver&author=DF.%20Pyke&author =R.%20Peterson&publication_year=1998) van der Vorst JGAJ, Beulens AJM, van Beek P (2000) Modelling and simulating multi-echelon food systems. Eur J Oper Res 122: 354–366 CrossRef (https://doi.org/10.1016/S0377-2217(99)00238-6) Google Scholar (http://scholar.google.com/scholar_lookup?title=Modelling%20and%20simulating%20multiechelon%20food%20systems&author=JGAJ.%20Vorst&author=AJM.%20Beulens&author=P.%20Beek&journal=Eur%20J%20Oper%20Res&volum e=122&pages=354-366&publication_year=2000) van Donselaar KH, de Kok AG, Rutten WGMM (1996) Two replenishment strategies for the lost sales inventory model: a comparison. Int J Prod Econ 46–47(1): 285–295 CrossRef (https://doi.org/10.1016/0925-5273(95)00066-6) Google Scholar (http://scholar.google.com/scholar_lookup? title=Two%20replenishment%20strategies%20for%20the%20lost%20sales%20inventory%20model%3A%20a%20comparison&author=KH.%20Do nselaar&author=AG.%20Kok&author=WGMM.%20Rutten&journal=Int%20J%20Prod%20Econ&volume=46%E2%80%9347&issue=1&pages=285 -295&publication_year=1996) van Donselaar KH, van Woensel T, Broekmeulen R, Fransoo J (2006) Inventory control of perishables in supermarkets. Int J Prod Econ 104(2): 462– 472 CrossRef (https://doi.org/10.1016/j.ijpe.2004.10.019) Google Scholar (http://scholar.google.com/scholar_lookup? title=Inventory%20control%20of%20perishables%20in%20supermarkets&author=KH.%20Donselaar&author=T.%20Woensel&author=R.%20Broek meulen&author=J.%20Fransoo&journal=Int%20J%20Prod%20Econ&volume=104&issue=2&pages=462-472&publication_year=2006) van Houtum GJ, Zijm WHM (2000) On the relationship between cost and service models for general inventory systems. Stat Neerl 54(2): 127–147 CrossRef (https://doi.org/10.1111/1467-9574.00132) Google Scholar (http://scholar.google.com/scholar_lookup? title=On%20the%20relationship%20between%20cost%20and%20service%20models%20for%20general%20inventory%20systems&author=GJ.%20 Houtum&author=WHM.%20Zijm&journal=Stat%20Neerl&volume=54&issue=2&pages=127-147&publication_year=2000) van Zyl G (1964) Inventory control for perishable commodities. Ph.D. thesis, University of North Carolina, Chapel Hill, NC Google Scholar (https://scholar.google.com/scholar? q=van%20Zyl%20G%20%281964%29%20Inventory%20control%20for%20perishable%20commodities.%20Ph.D.%20thesis%2C%20University% 20of%20North%20Carolina%2C%20Chapel%20Hill%2C%20NC) Williams CL, Patuwo BE (1999) A perishable inventory model with positive order lead times. Eur J Oper Res 116(2): 352–373 CrossRef (https://doi.org/10.1016/S0377-2217(98)00105-2) Google Scholar (http://scholar.google.com/scholar_lookup? title=A%20perishable%20inventory%20model%20with%20positive%20order%20lead%20times&author=CL.%20Williams&author=BE.%20Patuw o&journal=Eur%20J%20Oper%20Res&volume=116&issue=2&pages=352-373&publication_year=1999) Williams CL, Patuwo BE (2004) Analysis of the effect of various unit costs on the optimal incoming quantity in a perishable inventory model. Eur J Oper Res 156(1): 140–147 CrossRef (https://doi.org/10.1016/S0377-2217(02)00919-0) Google Scholar (http://scholar.google.com/scholar_lookup? title=Analysis%20of%20the%20effect%20of%20various%20unit%20costs%20on%20the%20optimal%20incoming%20quantity%20in%20a%20pe rishable%20inventory%20model&author=CL.%20Williams&author=BE.%20Patuwo&journal=Eur%20J%20Oper%20Res&volume=156&issue=1& pages=140-147&publication_year=2004)
Copyright information © Springer-Verlag 2010
About this article Cite this article as: Minner, S. & Transchel, S. OR Spectrum (2010) 32: 979. https://doi.org/10.1007/s00291-010-0196-1 DOI (Digital Object Identifier) https://doi.org/10.1007/s00291-010-0196-1 Publisher Name Springer-Verlag Print ISSN 0171-6468 Online ISSN 1436-6304 About this journal Reprints and Permissions
Personalised recommendations
© 2017 Springer International Publishing AG. Part of Springer Nature. Not logged in Not affiliated 185.191.229.108