Optimal Decisions for Deteriorating Items with Expiration Date and Uncertain Lead Time

Abstract

InventorydecisionsinsupplychainarecrucialforitssuccessThesedecisionsbecomemoreimportantfortheproductswithexpirationdateMakingthesedecisionsininventorysystemsisachallengingtaskformanagersWithtodayshighcompetitivemarkettoaffordthecostofwarehousesisaverydifficulttaskforthemanagementinmostofthecountriesManagersarefacedwiththeneedtodeliverahighlevelofservicewithminimalwarehouseandinventorycostSincealargeorderedquantityincreasestheworkforceofawarehouseSoitisnecessarytodeveloptoolswhichcanhelpmanagerstohandlethewarehousetoavoidtheextracostofhandlingSoitiseconomicaltoordertheinventoryaccordingtoavailablestoragespaceThusitcanbesaidthattheinventorycontrolproblemwithvariabledemandpatternfordeterioratingproductsisimportantinindustryandvirtuallyaffecttheeveryaspectofdailylifeoperationsMostapproachesintheliteratureforoptimizingdecisionsinsuchanenvironmentconsideronlyasingleiteminventoryInthepresentthesiswehavepresentedamultiiteminventorymodeltooptimizetheunittimeprofitofinventorymanagementfortheproductshavinganexpirationdateFurtherinthethesisaproblemwithspacerestrictionbasedondifferentleadtimesituationsisdevelopedAsononesidetheshortagecostsaresignificantontheothersidetomaintainappropriateinventorylevelsforsuchtypeofproductsandavoidshortagesisaveryproblematicjobIncaseofexpiryproductsthedemandfortheproductsalwaysdecreaseastheproductisnearertoitsexpirationdateSoitisnecessarytoexamineconsumersresponsetoexpirationdatesforgrocerystoreperishableproductsTakingintoconsiderationamodelfortwoechelonsupplychainunderinflationaryenvironmentwiththeeffectofpreservationtechnologyisdevelopedfurtherinthethesisAconceptualframeworkthatcapturesthefrequencywithwhichconsumerscheckexpirationdatesandtheirwillingnesstopayforaperishableoveritsshelflifehasbeendevelopedFurtherdifferentrealisticconceptssuchasintegratedinventorystockdependentdemandtradecreditpolicynoninstantaneousdeteriorationintheproductsandtoavailtheremainingstockinsecondarymarketareincorporatedinthedifferentchaptersofthepresentthesisThemodelsaredesignedwiththedifferentconceptsofvariablehol

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