Optimizing costs and emissions due to inventory replenishment of perishable products

This paper presents a bi-objective, mixed integer programming model to manage inventory replenishment decisions for fixed-shelf life perishable products. These are products such as dairy, canned products, or pharmaceuticals, which have an expiration date. The model minimizes costs and CO2 emissions due to inventory replenishment. The model presented in this paper is an extension of the economic lot-sizing model and captures the trade-offs between transportation and inventory costs, transportation mode and remaining shelf life of a product, and replenishment costs and emissions. The model considers different transportation modes; each mode has its own capacity, cost structure and lead time. Transportation modes considered include full truckloads, refrigerated trucks, and less-than-truckload. The model assumes a planning horizon of length T that repeats cyclically over time. The model is solved using a modified weighted sum approach. We perform extensive numerical experiments; the experimental results indicate that replenishment costs for perishable products are higher than for non-perishable products. Experimental results also indicate that replenishment costs for slow moving perishable products are higher than replenishment costs for fast moving perishable products.

Optimizing costs and emissions due to inventory replenishment of perishable products Conference Paper