Perishable Product Sensitivity Analysis in the Design of an Inventory Control System in a Three-Echelon Fruit Supply Chain

Abstract

A policy for inventory management should consider the optimal order quantity and order time to avoid costs related to understock or overstock (Vidal-Holguin in Fundamentos de control y gestion de inventarios. Programa Editorial Universidad del Valle, Santiago de Cali, 2010 [24]). However, there are special cases where the definition of an optimal inventory policy becomes complex. In fact, inventory policies definition in multi-echelon supply chains, centralized decision making scenarios and shared information for perishable products, have gained relevance at present, due to its complexity in incorporating the products deterioration rate and the recognized relevance of integration in supply chains to achieve greater competitiveness (Chaudhary et al. in J Adv Manag Res 15:306–346, 2018 [7]). This is the case of perishable products’ supply chains, where it is necessary to model the behavior of the product’s useful life to outline the design of the optimal inventory policy. In this chapter, the mathematical model presented in Rau et al. (Int J Prod Econ 86:155–168, 2003 [18]) and Rau et al. (Int J Syst Sci 35:293–303, 2004 [19]) for the management of inventories in three-echelon supply chains considering perishability is mathematically disaggregated. This paper also presents a case study carried out in a citrus supply chain involving a supplier, a producer, and a retailer or buyer. It also discusses the advantages of integration within inventory management throughout the supply chain. Finally, it shall put forward the most relevant results from applying the proposed model.