VENDOR MANAGED INVENTORY POLICY FOR PERISHABLE PRODUCTS UNDER A COMBINATION OF FIFO-LIFO STOCK CONTROL
Control & processing for perishable products
DOI:
https://doi.org/10.52292/j.laar.2024.1157Keywords:
Food processing, Optimal policy, Consumption, Dynamic programming, Shelf lifeAbstract
For retailing systems, arranging the perishable products has always been a challenge. Although more profit is made when products are sold with a FIFO policy, now customers taste in a competitive market which requires new products to be offered to them has changed the game. This paper considers a hybrid of FIFO-LIFO strategies for controlling a retailer's stock and its impact on the profits of the vendor managed inventory contracts. The problem is formulated as a multi-period, multi-store integer programming model which aims to maximize the total profit. The proposed model considers different selling prices and different holding costs for perishable products according to their remaining shelf life. A dynamic programming with a backward strategy is proposed to find the optimal order quantity for each store. The numerical experiments confirm the applicability and efficiency of the model illustrating impact of the crucial parameters of the model on the stocking policy.
Published
Issue
Section
License
Copyright (c) 2024 Latin American Applied Research - An international journal
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Once a paper is accepted for publication, the author is assumed to have transferred its copyright to the Publisher. The Publisher will not, however, put any limitation on the personal freedom of the author to use material from the paper in other publications. From September 2019 it is required that authors explicitly sign a copyright release form before their paper gets published. The Author Copyright Release form can be found here