NUMERICAL METHODS IN FINANCE
CONVEX AND NONCONVEX OPTIMIZATION
OPTIMAL CONTROL OF HYBRID SYSTEMS
MULTI OBJECTIVE OPTIMIZATION
GLOBAL OPTIMIZATION
CUTTING, PACKING AND KNAPSACK PROBLEMS
DISCRETE OPTIMIZATION
DATA MINING
NEURAL NETWORKS
ARTIFICIAL INTELLIGENCE
FUZZY SETS AND SYSTEMS
APPLICATIONS IN FINANCIAL SECTOR
FINANCIAL DYNAMICS AND IDENTIFICATION

COMPUTING REPLENISHMENT CYCLE POLICY PARAMETERS FOR A PERISHABLE ITEM
Roberto Rossi, S. Armagan Tarim, Brahim Hnich, Steven D. Prestwich

Book 
24^{th} Mini EURO Conference on Continuous Optimization and InformationBased Technologies in the Financial Sector (MEC EurOPT 2010) 
ISBN 
9789955285977 
Year 
2010 
Publisher 
Vilnius Gediminas Technical University Publishing
House "Technika" 
Pages 
241–247 
View
full text in PDF format 
Abstract
In many industrial environments there is a significant class of problems for which the perishable
nature of the inventory cannot be ignored in developing replenishment order plans. Food is the most
salient example of a perishable inventory item. In this work, we consider the periodicreview, singlelocation,
singleproduct production/inventory control problem under nonstationary stochastic demand and
service level constraints. The product we consider can be held in stock for a limited amount of time after
which it expires and it must be disposed of at a cost. In addition to wastage costs, our cost structure comprises fixed and unit variable ordering costs, and inventory holding costs. We propose an easytoimplement
replenishment cycle inventory control policy that yields at most 2N control parameters, where
N is the number of periods in our planning horizon. We also show, on a simple numerical example, the
improvement brought by this policy over two other simpler inventory control rules of common use.

Keywords: inventory management, perishability, uncertainty and risk, optimization. 
