Inventory Management for a Perishable Product Multi-echelon System PDF Download
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Author: Hsiang-Chun Yen
Publisher:
ISBN:
Category : Blood banks
Languages : en
Pages : 150
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Book Description
Author: Hsiang-Chun Yen
Publisher:
ISBN:
Category : Blood banks
Languages : en
Pages : 150
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Book Description
Author: Yogeshwar Dattatraya Suryawanshi
Publisher:
ISBN:
Category :
Languages : en
Pages : 110
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Book Description
Perishability presents a challenging problem in inventory management for the fresh produce industry since it can lead to higher inventory costs and lower service levels. If a supply chain has multiple echelons, that further complicates the issue since companies have an added risk of not having the right amount of product at the right location at the right time. We conduct our research on Chiquita's Fresh Express supply chain. We analyze the impact of perishability on total relevant costs. Our research focuses on determining the optimal inventory policy for the system considering inventory holding costs, shrinkage costs, lost sales costs, forecast accuracy and service levels. We test the sensitivity of the system with respect to forecast errors and the transportation lead time. We developed a discrete-event simulation model using Arena software to conduct the research. Our research demonstrates that by lowering the current target on-hand inventory levels at the distribution center and retail stores, inventory holding costs and shrinkage costs are reduced significantly. Under the optimal inventory policy, the system can save 31% in costs, improve the item fill rate at the distribution center, reduce the total shrinkage volume, and maintain high service levels of more than 95% at the retail stores. Our sensitivity analysis shows that the system is very sensitive to the forecast errors. Additionally, we recommend keeping the transportation lead time as low as possible to maximize the products' lifetime at the retail stores. Reducing the forecast errors or the transportation lead time would reduce the total relevant cost of the system while improving the item fill rates across the supply chain.
Author: Linlin Ma (Industrial engineer)
Publisher:
ISBN:
Category : Business logistics
Languages : en
Pages : 69
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Book Description
This paper presents solutions to the grocery industry's perishable inventory problem. To meet their customers' increasing desire for various kinds of perishable products from all over the world, management must deal with widely different suppliers and customers. They must make optimal operational decisions on how to handle procurement and distribution of ordered items. This is crucial to their profit margin especially when dealing with the deterioration of time sensitive goods in transit. This thesis analyzes when products should be ordered, how much of perishable items should be replenished and how goods are allocated to retail stores. A three-level supply chain is studied in this model, which consists of non-identical suppliers, distribution centers and retail stores. Existing models in the related literature often have negligible or identical lead-times of suppliers, and sole source suppliers taking advantage of their exclusivity. However, a grocery company usually has various suppliers (with quantity discounts) and operates multiple warehouses and retail stores. This research will focus on this more comprehensive scenario. Another problem in previous models is FIFO (First-In-First-Out) or LIFO (Last-In-First-Out) inventory policy, since the decreasing price towards the end of the shelf life has a negative impact on revenue. However, in order to achieve the highest profit, optimal decisions are based upon items in each stage of aging. The results will show comparison among the three inventory policies under different decay models.
Author: Alvaro Maggiar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We present an inventory management solution for a non-stationary capacitated multi-echelon distribution network involving thousands of products. Assuming backlogged sales, we revisit and leverage the seminal multi-echelon inventory management results in the literature to establish the structural properties of the problem, and derive an efficient and practical solution method. In particular, we describe how the additive separability nature of the objective function can be used in a dynamic programming framework to circumvent the usual curse of dimensionality inherent to high-dimensional inventory management problems. We incorporate features such as asynchronous replenishment intervals at the different echelons, accounting of perishability, capacity constraints (both volume and flow), stochastic lead times, reverse logistics, supply risk and risk-pooling. Illustrative examples demonstrate some of these features.A version of this model was tested at a large grocery retailer in a two-layer network, resulting in a statistically significant increase of availability, sold units, and revenue, while lowering inventory volume at the hub.
Author: Jing-Sheng J. Song
Publisher: Edward Elgar Publishing
ISBN: 180037710X
Category : Technology & Engineering
Languages : en
Pages : 565
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Book Description
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.
Author: Charles E. Pinkus
Publisher:
ISBN:
Category : Inventory control
Languages : en
Pages : 33
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Book Description
Large scale inventory distribution system typically comprise a hierarchy of retail stores and warehouses. The paper presents a model for finding the optimal design of such systems. Given the maximum number of facilities under consideration and their possible locations, the problem is to determine which facilities to include in the system and which products to stock at each in order to minimize the cost of the system. Demand for the products may be deterministic or stochastic. To use the model it is necessary to know the optimal inventory policies for the multi-echelon systems under consideration, however, an important feature of this work is that any multi-echelon model may be used in tandem with this design model. Included is an example to illustrate the model and the two points which are the basis for its formulation: first, there is generally no single design which is best for all products; second, the design which is optimal for a given product is not necessarily the best design to use when trying to minimize the cost of the entire system. (Author).
Author: Donald Gross
Publisher:
ISBN:
Category : Inventory control
Languages : en
Pages : 67
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Book Description
Large scale inventory distribution systems typically require a hierarchy of retail stores and warehouses to satisfy the demands of their customers. This paper presents a 0-1 nonlinear programming model for finding the best design of such systems. To use this model, it is necessary to know the optimal inventory policies for multi-echelon system. Therefore, part of this paper is devoted to describing how a dynamic programming approach, first suggested by Andrew Clark, can be used to obtained these policies. The paper presents examples of the use of the nonlinear programming model to find the design of an inventory distribution system. Finally, we present a reformulation of the nonlinear programming model as a 0-1 linear programming model, incorporate capacity constraints at the retail stores and warehouses, and illustrate the use of the new model. (Author).
Author: Karl G. Kempf
Publisher: Springer Science & Business Media
ISBN: 1441964851
Category : Business & Economics
Languages : en
Pages : 652
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Book Description
In two volumes, Planning Production and Inventories in the Extended Enterprise: A State of the Art Handbook examines production planning across the extended enterprise against a backdrop of important gaps between theory and practice. The early chapters describe the multifaceted nature of production planning problems and reveal many of the core complexities. The middle chapters describe recent research on theoretical techniques to manage these complexities. Accounts of production planning system currently in use in various industries are included in the later chapters. Throughout the two volumes there are suggestions on promising directions for future work focused on closing the gaps.
Author: G.D.H. (Frits) Claassen
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper focuses on a novel approach to cold chain management of perishable products. We extend the classical and frequently applied Economic Order Quantity model (EOQ) for its application in multi-echelon supply chains for highly perishable products. Literature shows that order-level inventory systems for perishable items are commonly modelled by parametric approaches e.g., a time-dependent (Weibull) deterioration rate. However, product deterioration of perishable fresh products is highly product dependent and most of all, both time- and temperature dependent. We take both time-temperature-dependent deterioration and the multi-echelon aspect of cold chains into account and integrate both aspects into a generically applicable EOQ-based methodology.We demonstrate the concept from a real-life case study for cold chain management in floriculture. Two commonly used multi-echelon supply chains for cut roses are considered and compared. The results show that the optimal order levels in different echelons of the supply chains are substantially different. In addition to the sojourn time, the temperature has a major impact on order levels, the total supply chain costs, and the remaining shelf life at the retail level. The proposed concept for extending the EOQ-based model to time- and temperature-dependent deterioration can be easily generalized and applied to other specific causes of product-dependent deterioration.
Author: Robert A. Davis
Publisher: John Wiley & Sons
ISBN: 1119174023
Category : Business & Economics
Languages : en
Pages : 320
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Book Description
Remove built-in supply chain weak points to more effectively balance supply and demand Demand-Driven Inventory Optimization and Replenishment shows how companies can support supply chain metrics and business initiatives by removing the weak points built into their inventory systems. Beginning with a thorough examination of Just in Time, Efficient Consumer Response, and Collaborative Forecasting, Planning, and Replenishment, this book walks you through the mathematical shortcuts set up in your management system that prevent you from attaining supply chain excellence. This expanded second edition includes new coverage of inventory performance, business verticals, business initiatives, and metrics, alongside case studies that illustrate how optimized inventory and replenishment delivers results across retail, high-tech, men's clothing, and food sectors. Inventory optimization allows you to avoid out-of-stock situations without impacting the bottom line with excessive inventory maintenance. By keeping just the right amount of inventory on hand, your company is better able to meet demand without sacrificing the cost-effectiveness of other supply chain strategies. The trick, however, is determining "just the right amount"—and this book provides the background and practical guidance you need to do just that. Examine the major supply chain strategies of the last 30 years Remove the shortcuts that prohibit supply chain excellence Optimize your supply/demand balance in any vertical Overcome systemic weaknesses to strengthen the bottom line Inventory optimization is benefitting companies around the world, as exemplified here by case studies involving Matas, PWT, Wistron, and Amway. When inefficiencies are built into the system, it's only smart business to identify and remove them—and implement a new streamlined process that runs like a well-oiled machine. Demand-Driven Inventory Optimization and Replenishment is an essential resource for exceptional supply chain management.
