Title: Inventory management of perishable products in a retail business: a comparison with and without in-store replenishment policies under different purchasing batch sizes

Authors: Navee Chiadamrong; Rigzin Lhamo

Addresses: Logistics and Supply Chain Systems Engineering Program (LSCSE), School of Manufacturing Systems and Mechanical Engineering, Sirindhorn International Institute of Technology, Thammasat University, Thailand ' Logistics and Supply Chain Systems Engineering Program (LSCSE), School of Manufacturing Systems and Mechanical Engineering, Sirindhorn International Institute of Technology, Thammasat University, Thailand

Abstract: Perishable products are products in daily life that expire or decrease in quality or value over time. As their freshness level decreases with time and inventory is lost by deterioration with time, traditional methods for managing inventory are not suitable for perishable products. Additional mechanisms are then required to manage the inventory of such products. In the study, taking into consideration the age of perishable inventories, these mechanisms are investigated in different scenarios, and with different cost combinations to study the effect on the inventory management of perishable products. The outcomes of the replenishment policies under different purchasing batch sizes with and without a backroom are also compared to find out how and in what situations the policy with backroom storage outperforms the others and can lead to cost reduction and higher profit as compared to the case without backroom storage. These findings help firms decide the best policy for managing perishable products in a certain business environment.

Keywords: inventory management; perishable products; in-store replenishment policies; simulation; optimisation; retailing; purchasing batch sizes; cost reduction.

DOI: 10.1504/IJLSM.2017.081501

International Journal of Logistics Systems and Management, 2017 Vol.26 No.2, pp.224 - 252

Received: 17 Aug 2015
Accepted: 25 Oct 2015
Published online: 10 Jan 2017 *

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