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Approximations for the relative outdating of perishable products by combining stochastic modeling, simulation and regression modeling

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  • van Donselaar, Karel H.
  • Broekmeulen, Rob A.C.M.

Abstract

In this paper we derive approximations for the expected amount of outdating (waste) in an inventory system with perishable products, periodic review, positive lead time, fixed case pack sizes and a First-In-First-Out withdrawal policy. Demand is discrete and stochastic. Demand which is not met from inventory on hand will be lost. The approximations can be used to evaluate how the amount of outdating can be reduced by changing the safety stock and/or the product and demand characteristics. We first derive approximations in an analytical way and then use regression to improve these approximations. The final approximation is very fast and performs very well: the mean and standard deviation of the approximation error are equal to −0.01% and 0.78%. Moreover, the approximation is applicable in situations with parameter settings which are frequently encountered in practice, and for which no other approximations have been derived in the literature before.

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  • van Donselaar, Karel H. & Broekmeulen, Rob A.C.M., 2012. "Approximations for the relative outdating of perishable products by combining stochastic modeling, simulation and regression modeling," International Journal of Production Economics, Elsevier, vol. 140(2), pages 660-669.
    • Handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:660-669
    DOI: 10.1016/j.ijpe.2012.02.023
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    8. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2014. "Optimal ordering and pricing policy for demand functions that are separable into price and inventory age," International Journal of Production Economics, Elsevier, vol. 155(C), pages 406-417.
    9. Kouki, Chaaben & Jouini, Oualid, 2015. "On the effect of lifetime variability on the performance of inventory systems," International Journal of Production Economics, Elsevier, vol. 167(C), pages 23-34.
    10. Janssen, Larissa & Diabat, Ali & Sauer, Jürgen & Herrmann, Frank, 2018. "A stochastic micro-periodic age-based inventory replenishment policy for perishable goods," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 445-465.
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    13. Gorria, Carlos & Lezaun, Mikel & López, F. Javier, 2022. "Performance measures of nonstationary inventory models for perishable products under the EWA policy," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1137-1150.
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    15. Sgarbossa, Fabio & Russo, Ivan, 2017. "A proactive model in sustainable food supply chain: Insight from a case study," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 596-606.
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