EURO 2024 Copenhagen
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4212. Optimizing assortments with age-dependent inventory

Invited abstract in session MA-50: Food Waste, stream Retail Operations.

Monday, 8:30-10:00
Room: M2 (building: 101)

Authors (first author is the speaker)

1. Manuel Ostermeier
University of Augsburg
2. Alexander Hübner
Supply and Value Chain Management, Technical University Munich
3. Lena Riesenegger
Supply and Value Chain Management, Technical University of Munich

Abstract

Determining the assortment and inventory levels based on their shelf life is essential for retailers to maximize profits while avoiding food waste. The limited shelf space and the handling of perishable products with limited shelf lives interrelate assortment and inventory decisions. A joint approach is needed that defines the assortment size and the maximum possible inventory levels while considering differing product ages and their implications on the planning. The product ages on the shelves are further impacted by the customers’ withdrawal behavior. For instance, customers intentionally selecting products with longer expiration dates change the order of depletion as older products are left on the shelf. These interferences need to be considered when deciding on the products within the assortment and their corresponding inventory levels. We develop the first multi-period approach to address the interrelation between assortment planning and inventory management by integrating product shelf life and outdating. The resulting planning problem is solved using an iterative approach that considers different customer withdrawal behaviors and established demand effects.

Keywords

Status: accepted

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