An EOQ model for perishable products with fixed shelf life under stochastic demand conditions

Abstract

The paper presents a mathematical stochastic model for perishable open-dating foods including shortage and outdating costs. The demand fluctuations have been taken into account modeling them through a normal distribution, and their impact on the storage time has been studied considering the stochastic nature of such a parameter in turn. The quantification of perished products has been also addressed, determining the probability for a product of remaining in stock beyond the end of its Shelf Life. On the basis of such premises, the optimal set of parameters that minimize the total unit cost has been determined. A numerical application and a sensitivity analysis show the practical applicability of the proposed model in the context of warehouse management, underlining managerial insights.