Authors
Duc Huy NGUYEN, Haoxun CHEN,
Title
Optimization of a perishable inventory system with both stochastic demand and supply: Comparison of two scenario approaches
In
The 17th International Conference in Operational Research (KOI 2018)
Publisher
Croatian Operational Research Society
Year
2018
Indexed by
Abstract
In this paper, we study a multi-period inventory model for a perishable product with both stochastic supply and demand in a rolling horizon framework. The product has a fi xed shelf life such as fresh products, blood cells, chemicals, drugs and other pharmaceutical products. The objective is to minimize the expected total cost composed of ordering, purchasing, holding, shortage and waste costs. We focus on nding a high-quality solution close to the optimal solution of the model that provides decision support for decision- makers. We propose a stochastic programming model and transform it into MILP model based on Conditional Scenarios (CS) approach to reduce the computational burden. By comparing with the Sample Average Approximation (SAA) method in a numerical study, we show that our method works efficiently.
Affiliations
Offprint