SELECTED PAPERS COMMITTEES BOARD OF REVIEWERS PREFACE

NUMERICAL METHODS IN FINANCE

CONVEX AND NON-CONVEX 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 24th Mini EURO Conference on Continuous Optimization and Information-Based Technologies in the Financial Sector (MEC EurOPT 2010)
ISBN 978-9955-28-597-7
Year 2010
Publisher Vilnius Gediminas Technical University Publishing House "Technika"
Pages 241–247
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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 periodic-review, singlelocation,
single-product production/inventory control problem under non-stationary 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 easy-toimplement
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.