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A replenishment policy for perishable products with non-linear holding cost under stochastic supply lead time

Sazvar, Z ; Sharif University of Technology | 2013

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  1. Type of Document: Article
  2. DOI: 10.1007/s00170-012-4042-2
  3. Publisher: 2013
  4. Abstract:
  5. The development and application of inventory models for deteriorating items is one of the main concerns of subject matter experts. The inventory models developed in this field have focused mainly on supply chains under the assumption of constant lead time. In this study, we develop an inventory model for a main class of deteriorating items, namely perishable products, under stochastic lead time assumption. The inventory system is modeled as a continuous review system (r, Q). Demand rate per unit time is assumed to be constant over an infinite planning horizon and the shortages could be backordered completely. For modeling the deterioration process, a non-linear holding cost is considered. Taking into account the stochastic lead time as well as a non-linear holding cost makes the mathematical model more complicated. We customize the proposed model for a uniform distribution function that could be tractable to solve optimally by means of an exact approach. We then solve an example taken from the literature to demonstrate the applicability and effectiveness of the proposed model. Finally, by doing several sensitivity analyses for the key parameters of the model, some managerial insights are proposed
  6. Keywords:
  7. Non-linear holding cost ; Perishable products ; Stochastic lead time ; Supply chain management ; Continuous review ; Demand rates ; Deteriorating items ; Deterioration process ; Development and applications ; Exact approach ; Holding costs ; Infinite planning horizons ; Inventory models ; Inventory systems ; Key parameters ; Leadtime ; Per unit ; Perishable product ; Replenishment policy ; Subject matter experts ; Uniform distribution ; Costs ; Deterioration ; Inventory control ; Mathematical models ; Stochastic systems
  8. Source: International Journal of Advanced Manufacturing Technology ; Volume 64, Issue 5-8 , 2013 , Pages 1087-1098 ; 02683768 (ISSN)
  9. URL: http://link.springer.com/article/10.1007%2Fs00170-012-4042-2