EURO 2024 Copenhagen
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2902. Integrating time-temperature dependent deterioration in an EOQ-based methodology for perishable products in multi-echelon supply chains

Invited abstract in session MB-50: Retail Inventory Management I, stream Retail Operations.

Monday, 10:30-12:00
Room: M2 (building: 101)

Authors (first author is the speaker)

1. G.D.H. (Frits) Claassen
Operations Research and Logistics, Wageningen University

Abstract

Literature shows that order-level inventory systems for perishable items are often modelled by parametric approaches e.g., a time-dependent (Weibull) deterioration rate. In practice however, product deterioration for perishable products is a complex process, highly product dependent and, crucially, depending on environmental conditions from origin to final destination in supply chains. We develop a generalizable concept for order-level inventory systems in multi-echelon supply chains in which product-specific deterioration is derived from biological sciences.
We take time-temperature-dependent deterioration, and multi-echelon supply chains into consideration 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 common multi-echelon cold chains for cut roses in practice are considered and compared. The results show that the optimal order levels for different actors in 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 retail level. We demonstrate that 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.

Keywords

Status: accepted

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