An EOQ Model for Temperature-Sensitive Deteriorating Items in Cold Chain Operations

Abstract

To improve the inventory management of cold chain logistics, we propose an economic order quantity (EOQ) inventory model for temperature-sensitive deteriorating products. Considering that the products are temperature-sensitive, the deterioration rate of the proposed model is a function of the temperature. In addition, the transportation cost, which is a function of the quantity ordered, is considered in this study. This article aims to find the optimal value of the total profit, selling price, and the length of the ordering cycle. Numerical examples are provided; the sensitivity analysis shows that the total profit is much more sensitive to transportation costs, compared with ordering and holding costs.

Keywords

• deteriorating inventory model
• deterioration
• EOQ
• temperature sensitive
• optimal
• transportation cost