Inventory management in systems with perishable goods and unreliable production-delivery channels

Abstract

The paper considers the problem of establishing an efficient control strategy for production-inventory systems in which the stock replenishment process is unreliable. In the analyzed setting, the stock used to satisfy unknown, variable demand deteriorates with time. It is refilled using multiple production-delivery channels. Due to information distortion, product defects, or improper transportation, the shipments may arrive damaged, or incomplete. The setting is modeled as a time-varying discrete-time system with multiple time-delays. A new delay compensation mechanism, which provides smooth ordering pattern and ensures closed-loop stability for arbitrary delay, is proposed. The control system properties are formally proved and illustrated in numerical experiments.