Stochastic Perishable Inventory System Analysis With Two Types Of Customers In The Supply Chain

Abstract

In the supply chain model being examined in this study, there are two different client expectations. A warehouse, a single distribution centre, a single retailer, and the handling of a single perishable product make up the system. Retailer node (lower echelon) assumes a A(s, S) type inventory system with Poisson demand and exponentially dispersed lead times, and distribution centre assumes a (0, kQ) policy (middle echelon). Demands that happen during the times when there is no stock are taken to be lost sales. The merchandise is sent from the distribution centre to the stores in packs of Q(= S − s) items. It is believed that only the retailer nodes with rate γ experience item perishability. The upper echelon (warehouse) replaces the distribution center’s stock with exponentially distributed lead times due to its ample supply. Demands arrive at the retailer node in two categories: (i) normal customers; and (ii) priority customers, with arrival rates of α and β. It is possible to obtain the metrics of system performance as well as the steady state probability distribution of system states. The proposed paradigm is demonstrated with numerical examples.

Keywords

• supply chain management, perishable inventory system, markov process, perishable inventory optimization