Managing Perishable Inventory Systems With Multiple Demand Classes

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Managing Perishable Inventory Systems with Multiple Demand Classes

Author : Hossein Abouee Mehrizi
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Managing Perishable Inventory Systems with Multiple Demand Classes by : Hossein Abouee Mehrizi

Download or read book Managing Perishable Inventory Systems with Multiple Demand Classes written by Hossein Abouee Mehrizi and published by . This book was released on 2018 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we study a multi-period stochastic perishable inventory system with multiple demand classes that require products of different ages. The firm orders the product with a positive leadtime and sells it to multiple demand classes, each only accepting products with remaining lifetime longer than a threshold. In each period, after demand realization, the firm decides how to allocate the on-hand inventory to different demand classes with different backorder or lost-sale cost. At the end of each period, the firm can dispose inventory of any age. We formulate this problem as a Markov decision process and characterize the optimal ordering, allocation, and disposal policies. When unfulfilled demand is backlogged, we show that the optimal order quantity is decreasing in the inventory levels and is more sensitive to the inventory level of fresher products, the optimal allocation policy is a sequential rationing policy, and the optimal disposal policy is characterized by a set of thresholds. For the lost-sale case, we show that the optimal allocation and disposal policies have the same structure but the optimal ordering policy may be different. Based on the structure of the optimal policy, we develop an efficient heuristic that is at most 4% away from the optimal cost in our numerical examples. Using numerical studies, we show that the ordering and allocation policies are close to optimal even if the firm cannot intentionally dispose products. Moreover, ignoring the difference between demand classes and using a simple allocation policy (e.g., FIFO) can significantly increase the total cost. We examine how the firm can improve the control of perishable items and show that the benefit of decreasing the leadtime is more significant than that of increasing the lifetime of the products or that of decreasing the acceptance threshold of the demand. The analysis is extended to systems with age dependent disposal cost and stochastic supply.

Managing Perishable Inventory Systems With Age-Differentiated Demand

Author : Shouchang Chen
Publisher :
ISBN 13 :
Total Pages : 62 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Managing Perishable Inventory Systems With Age-Differentiated Demand by : Shouchang Chen

Download or read book Managing Perishable Inventory Systems With Age-Differentiated Demand written by Shouchang Chen and published by . This book was released on 2020 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider a periodic-review perishable inventory system with multiple demand classes, each characterized by a different lost-sales cost and a least freshness requirement. Demands of different classes in the same period can be correlated, while demands across periods are independent but not necessarily identical. In each period, the firm jointly makes the decisions regarding inventory issuing, rationing, production/ordering, and disposal. The objective is to minimize the total discounted expected cost over the entire planning horizon including linear ordering cost, inventory holding/lost-sales cost, expiration cost and disposal cost. By establishing new properties of multimodularity, we are able to explore some monotonicity and bounded sensitivity properties of the optimal policies and show that the optimal inventory issuing policy follows the first-in-first-out (FIFO) rule. The optimality analysis enables us to propose a novel heuristic, called adaptive approximation approach, which can be recursively calculated through a single-dimension dynamic program. Numerical studies demonstrate that our proposed approximation approach is nearly optimal with the average optimality gap 0.30% and significantly outperforms existing heuristics studied in the literature. Another important observation from numerical studies is that ignoring customers' freshness requirements can lead to a significant increase in total costs. Our heuristic idea can also be applied to the setting with the last-in-first-out (LIFO) issuing rule and still performs rather well.

On Multi-product Perishable Inventory Systems with Dependent Demands

Author : Bryan L. Deuermeyer
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (781 download)

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Book Synopsis On Multi-product Perishable Inventory Systems with Dependent Demands by : Bryan L. Deuermeyer

Download or read book On Multi-product Perishable Inventory Systems with Dependent Demands written by Bryan L. Deuermeyer and published by . This book was released on 1977 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Perishable Inventory Systems

Author : Steven Nahmias
Publisher : Springer Science & Business Media
ISBN 13 : 1441979999
Total Pages : 89 pages
Book Rating : 4.4/5 (419 download)

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Book Synopsis Perishable Inventory Systems by : Steven Nahmias

Download or read book Perishable Inventory Systems written by Steven Nahmias and published by Springer Science & Business Media. This book was released on 2011-05-17 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: A perishable item is one that has constant utility up until an expiration date (which may be known or uncertain), at which point the utility drops to zero. This includes many types of packaged foods such as milk, cheese, processed meats, and canned goods. It also includes virtually all pharmaceuticals and photographic film, as well as whole blood supplies. This book is the first devoted solely to perishable inventory systems. The book’s ten chapters first cover the preliminaries of periodic review versus continuous review and look at a one-period newsvendor perishable inventory model. The author moves to the basic multiperiod dynamic model, and then considers the extensions of random lifetime, inclusion of a set-up cost, and multiproduct models of perishables. A chapter on continuous review models looks at one-for-one policies, models with zero lead time, optimal policies with positive lead time, and an alternative approach. Additional chapters present material on approximate order policies, inventory depletion management, and deterministic models, including the basic EOQ model with perishability and the dynamic deterministic model with perishability. Finally, chapters explore decaying inventories, queues with impatient customers, and blood bank inventory control. Anyone researching perishable inventory systems will find much to work with here. Practitioners and consultants will also now have a single well-referenced source of up-to-date information to work with.

Research Handbook on Inventory Management

Author : Jing-Sheng J. Song
Publisher : Edward Elgar Publishing
ISBN 13 : 180037710X
Total Pages : 565 pages
Book Rating : 4.8/5 (3 download)

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Book Synopsis Research Handbook on Inventory Management by : Jing-Sheng J. Song

Download or read book Research Handbook on Inventory Management written by Jing-Sheng J. Song and published by Edward Elgar Publishing. This book was released on 2023-08-14 with total page 565 pages. Available in PDF, EPUB and Kindle. Book excerpt: This comprehensive Handbook provides an overview of state-of-the-art research on quantitative models for inventory management. Despite over half a century’s progress, inventory management remains a challenge, as evidenced by the recent Covid-19 pandemic. With an expanse of world-renowned inventory scholars from major international research universities, this Handbook explores key areas including mathematical modelling, the interplay of inventory decisions and other business decisions and the unique challenges posed to multiple industries.

Managing Perishable Inventory Systems as Non-Perishable Ones

Author : Hailun Zhang
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Managing Perishable Inventory Systems as Non-Perishable Ones by : Hailun Zhang

Download or read book Managing Perishable Inventory Systems as Non-Perishable Ones written by Hailun Zhang and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Perishable inventory problems have a long history and involve two fundamental decisions, how much to order and how much old inventory to clear before expiration, that are known to be difficult to optimize due to the curse of dimensionality. Most early work ignores the clearance decision and focuses solely on the ordering decision until recently where heuristic clearance policies have been developed. In this paper, we approach the problem from a different angle by exploring its asymptotic behavior, i.e., perishability can be ignored in many cases and hence clearance of inventory is not necessary except at the beginning of the planning horizon when a system is large enough. Inspired by such asymptotic behavior, we examine simple policies that ignore clearance under minor conditions and establish theoretical bounds for them. The bounds not only vanish asymptotically, but also indicate a system size required to guarantee any given optimality gap. Numerical studies suggest that such policies can work very well for systems with reasonable sizes and practical management of complex perishable inventory systems is not so much harder than that of non-perishable ones.

INVENTORY MANAGEMENT: Controlling in a Fluctuating Demand Environment

Author : R. S. Saxena
Publisher : Global India Publications
ISBN 13 : 9789380228211
Total Pages : 322 pages
Book Rating : 4.2/5 (282 download)

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Book Synopsis INVENTORY MANAGEMENT: Controlling in a Fluctuating Demand Environment by : R. S. Saxena

Download or read book INVENTORY MANAGEMENT: Controlling in a Fluctuating Demand Environment written by R. S. Saxena and published by Global India Publications. This book was released on 2009-12 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is for the inventory control practitioner.WIth the techniques described many people have been able to manage their stock of inventory so that their customers are happier and so are the accountants. The reduction of inventory value, the avoidance of unnecessary work and the improvement of customer service can be accomplished at the sam time through simple application of the techniques discussed. Inventory practitioners should be able to use this book to understand the best approaches and then to apply them to their own circumstances. Simple application of the methods is most succesful, while modifications usually result in less effective outcomes.

2-Approximation Policies for Perishable Inventory Systems when FIFO Is an Optimal Issuing Policy

Author : Can Zhang
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis 2-Approximation Policies for Perishable Inventory Systems when FIFO Is an Optimal Issuing Policy by : Can Zhang

Download or read book 2-Approximation Policies for Perishable Inventory Systems when FIFO Is an Optimal Issuing Policy written by Can Zhang and published by . This book was released on 2019 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Motivated by a platelet inventory management problem, we study periodic-review, fixed-lifetime perishable inventory systems where demand is a general stochastic process. The optimal solution for this problem is computationally intractable due to the “curse of dimensionality”. In this paper, we first present an approximation policy that we call the marginal-cost dual-balancing policy for perishable inventory systems. We prove that when first-in-first-out (FIFO) is an optimal issuing policy, our proposed policy admits a constant worst-case performance bound of two, a tighter performance bound compared to the existing results presented in the perishable inventory literature. We then extend the literature on the optimality of the FIFO issuing policy and present new sufficient conditions to ensure the optimality of FIFO. Further, we present a tight example to show that the performance bound of two of the balancing policy can be achieved asymptotically when the unit shortage penalty goes to infinity (in which case the balancing policy tends to under-order). Motivated by this result, we anticipate that the balancing policy as well as other existing balancing-type policies presented in the literature may perform poorly when the unit shortage penalty becomes large (these policies all tend to under-order), and we present a new policy that we call the truncated-balancing policy to overcome this shortcoming. By combining our worst-case analysis ideas for the balancing policy with a structural property called L-natural-convexity, we prove that the truncated-balancing policy also has a worst-case performance guarantee of two when FIFO is an optimal issuing policy. Finally, we conduct extensive numerical analyses and show that the truncated-balancing policy has a significant performance improvement over the existing policies when the unit shortage penalty becomes (reasonably) large.

Optimality for a Class of Perishable Inventory Policies Under Stochastic Demand [microform]

Author : M. (Myron) Hlynka
Publisher : Ann Arbor, Mich. : University Microfilms International
ISBN 13 :
Total Pages : 176 pages
Book Rating : 4.:/5 (647 download)

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Book Synopsis Optimality for a Class of Perishable Inventory Policies Under Stochastic Demand [microform] by : M. (Myron) Hlynka

Download or read book Optimality for a Class of Perishable Inventory Policies Under Stochastic Demand [microform] written by M. (Myron) Hlynka and published by Ann Arbor, Mich. : University Microfilms International. This book was released on 1985 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Simple Analytical Models for Perishable Inventory Systems

Author : Stephen C. Graves
Publisher :
ISBN 13 :
Total Pages : 25 pages
Book Rating : 4.:/5 (227 download)

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Book Synopsis Simple Analytical Models for Perishable Inventory Systems by : Stephen C. Graves

Download or read book Simple Analytical Models for Perishable Inventory Systems written by Stephen C. Graves and published by . This book was released on 1978 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops three distinct models for studying perishable inventory systems. The perishable items have a deterministic usable life after which they must be outdated. For each of the models, analytical expressions are found for steady-state distributions which characterize the inventory systems. Knowledge of this steady-state behavior may be used for evaluation of system performance, and for consideration of alternatives for improving system performance. The first model considered assumes that both the demand process and the inventory replenishment process are stochastic processes that may be modelled as Poisson processes. The second and third model assume that inventory is replenished by a constant production process. The second model, assuming continuous inventory units, has Poisson demand requests with the size of each request distributed as an exponential random variable. The third model has Poisson demand requests with all demands being for a single unit. (Author).

An Overview of Inventory Systems with Several Demand Classes

Author : Marcel Jacobus Kleijn
Publisher :
ISBN 13 :
Total Pages : 13 pages
Book Rating : 4.:/5 (678 download)

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Book Synopsis An Overview of Inventory Systems with Several Demand Classes by : Marcel Jacobus Kleijn

Download or read book An Overview of Inventory Systems with Several Demand Classes written by Marcel Jacobus Kleijn and published by . This book was released on 1998 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Production and Inventory Management with Substitutions

Author : J. Christian Lang
Publisher : Springer Science & Business Media
ISBN 13 : 3642042473
Total Pages : 271 pages
Book Rating : 4.6/5 (42 download)

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Book Synopsis Production and Inventory Management with Substitutions by : J. Christian Lang

Download or read book Production and Inventory Management with Substitutions written by J. Christian Lang and published by Springer Science & Business Media. This book was released on 2009-11-25 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: Quantitativeapproachesforsolvingproductionplanningandinventorymanagement problems in industry have gained growing importance in the past years. Due to the increasinguse of AdvancedPlanningSystems, a widespreadpracticalapplicationof the sophisticated optimization models and algorithms developed by the Production Management and Operations Research community now seem within reach. The possibility that productscan be replaced by certain substitute productsexists in various application areas of production planning and inventory management. Substitutions can be useful for a number of reasons, among others to circ- vent production and supply bottlenecks and disruptions, increase the service level, reduce setup costs and times, and lower inventories and thereby decrease ca- tal lockup. Considering the current trend in industry towards shorter product life cycles and greater product variety, the importance of substitutions appears likely to grow. Closely related to substitutions are ?exible bills-of-materials and recipes in multi-level production systems. However, so far, the aspect of substitutions has not attracted much attention in academic literature. Existing lot-sizing models matching complex requirements of industrial optimization problems (e.g., constrained capacities, sequence-dependent setups, multiple resources) such as the Capacitated Lot-Sizing Problem with Sequence-Dependent Setups (CLSD) and the General Lot-Sizing and Scheduling Problem for Multiple Production Stages (GLSPMS) do not feature in substitution options.

Stochastic Perishable Inventory Systems

Author : Yuhe Diao
Publisher :
ISBN 13 :
Total Pages : 61 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Stochastic Perishable Inventory Systems by : Yuhe Diao

Download or read book Stochastic Perishable Inventory Systems written by Yuhe Diao and published by . This book was released on 2016 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a single-item, multi-period, stochastic perishable inventory problem under both backlogging and lost-sales circumstances, with and without an order capacity constraint in each period. We first model the problem as a dynamic program and then develop two heuristics namely, Dual-Balancing (DB) and Look-Ahead (LA) policies, to approximate the optimal inventory level at the beginning of each period. To characterize the holding and backlog cost functions under the proposed polices, we introduce a truncated marginal holding cost for the marginal cost accounting scheme. Our numerical examples demonstrate that both DB and LA policies have a possible worst-case performance guarantee of two in perishable inventory systems under different assumptions, and the LA policy significantly outperforms the DB policy in most situations. We also analyze the target inventory level in each period (the inventory level at the beginning of each period) under different policies. We observe that the target inventory level under the LA policy is not larger than the optimal one in each period in systems without an order capacity constraint.

Continuous-Review Policies for a Multi-Echelon Inventory Problem With Stochastic Demand (Classic Reprint)

Author : Marc de Bodt
Publisher :
ISBN 13 : 9781332256280
Total Pages : 58 pages
Book Rating : 4.2/5 (562 download)

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Book Synopsis Continuous-Review Policies for a Multi-Echelon Inventory Problem With Stochastic Demand (Classic Reprint) by : Marc de Bodt

Download or read book Continuous-Review Policies for a Multi-Echelon Inventory Problem With Stochastic Demand (Classic Reprint) written by Marc de Bodt and published by . This book was released on 2015-08-05 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Continuous-Review Policies for a Multi-Echelon Inventory Problem With Stochastic Demand Continuous-Review Policies for a Multi-Echelon Inventory Problem With Stochastic Demand was written by Marc de Bodt and Stephen C. Graves in 1982. This is a 58 page book, containing 5607 words and 5 pictures. Search Inside is enabled for this title. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

Optimal Inventory Model for Managing Demand-supply Mismatches for Perishables with Stochastic Supply

Author : Vishwanathan Parameshwaran lyer Nurani
Publisher :
ISBN 13 :
Total Pages : 66 pages
Book Rating : 4.:/5 (111 download)

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Book Synopsis Optimal Inventory Model for Managing Demand-supply Mismatches for Perishables with Stochastic Supply by : Vishwanathan Parameshwaran lyer Nurani

Download or read book Optimal Inventory Model for Managing Demand-supply Mismatches for Perishables with Stochastic Supply written by Vishwanathan Parameshwaran lyer Nurani and published by . This book was released on 2019 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: While festivals bring a reason to cheer for everyone, businesses dealing with a spike in demand for perishables may have to live with the misery of lost sales and/or expired items. In the case of the dairy industry that deals with liquid milk, both raw material, and finished goods are perishable, which implies that merely stockpiling inventory of either item, without paying attention to potential inventory losses, cannot be an optimal strategy. In developing countries, the supplier base for perishables like milk, fruits, vegetables, flowers, etc. mostly comprise of small farmers instead of corporate/professional agencies, thus leading to supply variability. During special occasions like festivals, as individuals set aside more of the raw material for their own consumption, we encounter a reduction in supply. Around the same time, we notice a spike in customer demand, leading to a demand-supply mismatch. Companies dealing with perishables need an analytical approach to manage this. In this thesis, we present a framework to address this problem of intermittent demand-supply mismatch using a 3-stage stochastic optimization model. We decide on the sourcing targets, the production plans based on supply realized, and finally, the dispatch plan based on orders received. As a case study, we analyze the operations and data from a private dairy company in eastern India, to understand the research problem and the applicability of the resulting model. We notice the impact of demand spikes and supply reduction in two areas: we increase supply targets in the periods preceding the demand spike; and we increase supply targets in periods when supply is expected to decrease, while demand is as usual. When there are multiple festival days within the time series, the compounding of impact depends on the sequencing of the events. Finally, when we introduce the realistic constraint that the supply target needs to be constant throughout the time series, we see a degradation in the profitability, as we need to tradeoff between lost sales and wasted products. While the focus of this case study is the dairy industry, the conclusions from this research are broadly applicable to other industries dealing with perishables.

Inventory and Production Management in Supply Chains

Author : Edward A. Silver
Publisher : CRC Press
ISBN 13 : 1466558628
Total Pages : 810 pages
Book Rating : 4.4/5 (665 download)

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Book Synopsis Inventory and Production Management in Supply Chains by : Edward A. Silver

Download or read book Inventory and Production Management in Supply Chains written by Edward A. Silver and published by CRC Press. This book was released on 2016-12-19 with total page 810 pages. Available in PDF, EPUB and Kindle. Book excerpt: Authored by a team of experts, the new edition of this bestseller presents practical techniques for managing inventory and production throughout supply chains. It covers the current context of inventory and production management, replenishment systems for managing individual inventories within a firm, managing inventory in multiple locations and firms, and production management. The book presents sophisticated concepts and solutions with an eye towards today’s economy of global demand, cost-saving, and rapid cycles. It explains how to decrease working capital and how to deal with coordinating chains across boundaries.

Inventory Optimization for Perishables Subject to Supply Disruptions

Author : Zumbul Atan
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Inventory Optimization for Perishables Subject to Supply Disruptions by : Zumbul Atan

Download or read book Inventory Optimization for Perishables Subject to Supply Disruptions written by Zumbul Atan and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a retailer selling perishable products with fixed lifetime. Retailer's supply system is subject to random disruptions. Assuming a base-stock policy, deterministic demand and stationary parameters, we derive an expression for the expected cost function which consists of holding, backordering and perishing costs. After analyzing the properties of this function, we determine the closed form expression for the optimal base-stock level. This is the first paper to study the effects of supply disruptions on perishable-product inventory systems. Our analysis suggests that the optimal base-stock level depends on the lifetime but not on the unit perishing cost. We show that, for items with short lifetime, the choice of the base-stock level has a bigger impact on the cost than for items with a longer lifetime. We also show that if the retailer can manage to make the system safer, it is possible to operate with the same expected cost even with products with shorter lifetime. When it comes to disruption management, we conclude that companies should concentrate more on reducing the duration of supply disruptions instead of trying to prevent them. Finally, we show how to use our model for systems with stochastic demand and non-stationary parameters.