Inventory management policy for perishable products with Weibull deterioration and constrained recovery assumption based on the residual life

Abstract

Economic order quantity models for perishable products generally disregard the relationship between the deterioration rate and the characteristic life (CL). They assume that the cycle time is lower than the CL, and the products that are in stock at the end of the cycle time are considered as outdated. This involves that still fresh products are salvaged at discounted price or disposed of. The paper presents an inventory model for perishable products, namely open dating and fruit and vegetables, in the presence of time-varying CL, Weibull deterioration model and uncertain demand. The relationship between the Weibull deterioration model and the CL is enforced, determining whether to dispose of the products or salvage them at alternative markets. Results show that the model can be solved and the operating variables optimised.