A multi-criteria inventory management system for perishable & substitutable products

Date
2015-10-17
Authors
Duong, LNK
Wood, LC
Wang, WYC
Supervisor
Item type
Journal Article
Degree name
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Abstract

Perishable products represent a vital area in the retail industry and our daily lives. However, when considered with product substitution (which provides more choices) the short lifetime of perishable products creates significant challenges for the inventory management (e.g., one-third of food products are wasted). The main question is: what is the suitable ‘inventory policy’ when we have products that are both perishable and substitutable? Appropriate performance metrics are proposed to evaluate the whole system and provide a robust solution while also being easy for professionals to understand and adopt. Therefore, this paper proposes to use multi-metric approach, including Order Rate Variance Ratio, Average Inventory, and Fill Rate. The paper extends inventory theory to consider inventory management of products where they possess multi-period lifetime, positive lead time, required customer service level, and each item is treated separately. Under these circumstances, as the first research adopting these easily captured and analysed performance metrics, the proposed model will enable management of realistic scenarios by incorporating multiple inventory characteristics that support cross-functional continuous improvement.

Description
Keywords
Perishable , Substitutable , Multi-echelon inventory management , Simulation , Performance metrics
Source
Procedia Manufacturing, Vol. 2, pp. 66-76
Rights statement
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)