Inventory optimization for perishables subject to supply disruptions

Z. Atan, M. Rousseau

Research output: Contribution to journalArticleAcademicpeer-review

11 Citations (Scopus)
208 Downloads (Pure)

Abstract

We study a retailer selling perishable products with fixed lifetime. The retailer’s supply system is subject to random disruptions. Assuming a base-stock policy, deterministic demand and stationary cost parameters, we determine the expression for the optimal base-stock level. We show that if the retailer manages to make the system safer, it is possible to operate with the same expected cost even with products with shorter lifetimes. We conclude that the retailer should concentrate on reducing disruptions’ durations instead of their occurrence rate.

Original languageEnglish
Pages (from-to)89-108
Number of pages20
JournalOptimization Letters
Volume10
Issue number1
DOIs
Publication statusPublished - 1 Jan 2016

Keywords

  • Inventory mitigation strategy
  • Perishable products
  • Risk management
  • Supply disruptions

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