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Existing studies on models of perishable inventory policy are mostly established according to the base assumption that a fraction of items stocked depletes instantaneously over time due to direct spoilage. For food products over the storage time the quality does degrade, however, the quantity of items typically remains constant. Therefore, this research proposes an integrated approach for addressing food inventory policy for managing the flow of a food product incorporating different quality characteristics, in a supply chain system, comprising a single vendor and multiple buyers (SVMB). The kinetic model is applied to represent the quality degradation of the raw material at the vendor (manufacturer), while the shelf-life based pricing is adopted to characterise the value degradation of finished goods at the buyers (retailers). A mathematical model representing the considered system is established to maximise the joint profit of the whole system. It is achieved by coordinating the manufacturing cycle and the inbound-outbound delivery frequencies of materials over the manufacturing cycle. The numerical test shows that the proposed model returns a better benefit compared to the benchmark model. Refereed/Peer-reviewed

Research on procurement-production systems for deteriorating items has been done. The majority of studies assume that the perishable characteristics affect only the quantity of inventoried items. For food products, however, their quantity remains constant during their shelf life period, but the quality deteriorates over time. This paper proposes a new procurement-production model incorporating this situation. The quality change behavior of food products is approached differently depending on their forms either as raw materials or finished goods. As raw materials, the kinetic model is used to represent the quality degradation during storage time, while as finished goods the shelf-life dependent pricing is utilized to describe the value loss due to the quality perception of customers. A mathematical model representing the integrated procurement-production of raw materials and finished goods at a manufacturer is established in this research. The objective is to maximize the total profit per unit time of the system by controlling a number of variables, namely the production cycle (T), the number of raw materials’ procurement over one production cycle (m) and the number of finished goods delivery over one production cycle (n). Refereed/Peer-reviewed

Thesis (PhD(Mechanical and Manuf Eng))--University of South Australia, 2016. Includes bibliographical references (pages 190-208) Unlike the majority of existing research, this study develops the production-inventory policy within the supply chain by taking into account the quality changes of food, either as raw materials or as finished goods. To describe the quality degradation of raw material,a kinetic model is applied. Whereas to characterise the perceived value loss of finished goods, a shelf-life based price function is utilised. In addition, to leverage the model performance, a synchronised approach is applied for streamlining the flow of food inventories through a single-vendor multi-buyer (SVMB) supply chain system. Those problems are formulated in a mathematical model using a mixed integer nonlinear programming (MINLP) with a combinatorial decision variable. The objective function of this model is to maximise the profit by determining four decision variables, i.e. the length of the production cycle, the number of raw material replenishment, the sequence of the product shipment and the delivery frequencies of finished goods over the production cycle.

The majority research on inventory model for deteriorating items in multi-echelon system assumes that a physical depletion of some inventories occurred over time. It means that the inventory is depleted not only due to the demand but also due to some deteriorated items. In food products, however, during a certain period, its quantity remains the same while its quality does degrade over time. Therefore, this study is aimed at developing a more representative inventory model for mimicking food deterioration characteristics. A mathematical model is established to represent the integrated inventory policy of procurement-production-delivery in which the total profit of the whole system is the objective function. The length of the production cycle, the frequency of raw material procurement and finished goods deliveries over the production cycle are the controlling variables. The numerical test indicates that the proposed model yields to a better profit compared to the benchmark model. Refereed/Peer-reviewed

Research on coordinated inventory policy for perishable items between a manufacturer and a retailer has been extensively done. The majority studies however assumed that the stored item starts to deteriorate instantaneously once its production process completed. This may be suitable for representing the characteristic of certain perishable items such as alcohol or radioactive materials. In many cases, particularly for food products such as fruits, vegetables, meat and bakeries,over the shelf-life the quantity remains constant while the value does degrade once the product is approaching its expiration date. Despite this phenomenon, less research addresses this issue, particularly in a multi-echelon supply chain system.Therefore, this research deals with inventory policy for a manufacturer-retailer system considering value degradation for food products. A mathematical model representing the system is proposed. A shelf-life based pricing function is applied to represent the value degradation of the product. The objective function is to maximise the joint profit per unit time which is achieved by optimising the length of manufacturer’s production cycle (T) and the ordering frequency of finished goods (n) over the production cycle. The numerical test for the established model demonstrates that the model outperforms the existing model in terms of its potential capability of returning a significant profit improvement Refereed/Peer-reviewed

Existing studies on integrated production-inventory models for perishable items demonstrate that an inventory for such products will diminish due to demand and deterioration. They mostly assume that the quantity of stored item starts to deplete immediately. It does happen for certain perishable items such as gasoline, alcohol or radioactive materials. Over the self-life of numerous food products, such as vegetables, meat and bread, however, the quantity remains constant but the quality or value does deteriorate as the self-life approaches the expiration date. Unfortunately, less research is found addressing this circumstance particularly when a multi-echelon supply chain system is considered. For this reason, this research proposes a mathematical model of an integrated production-inventory system incorporating value degradation which is better suited to food products. This system comprises a manufacturer and a retailer. A shelf-life based pricing represents the value degradation at the retailer since the customers typically examine the quality of the purchased items based on its best-before-date (BBD). The objective function of the resultant model is to maximise the joint profit per unit time which is achieved by optimising the length of production cycle (T) and the ordering number of finished goods (n) over the production cycle. The conducted numerical test demonstrates that the established model could yield a significant potential saving compared to the existing models. Refereed/Peer-reviewed

Research on inventory models for deteriorating items has been extensively done. A great majority of these studies assume that the quantity of inventory is depleted by demand and deterioration which is applicable for certain items like alcohol, gasoline or radio-active materials. For food products, however, during a certain period of time the quantity is depleted only by demand while the quality is degraded over time. This paper proposes an inventory model for food products accommodating this situation. A kinetic modelling function is utilized to describe the quality loss during storage time. In addition, as food is a dynamic item where its quality degradation rate is influenced by storage conditions, particularly the temperature, controlling this parameter with additional cost could reduce the rate of quality loss. Therefore, by determining the ordering cycle and temperature of food storage, this research aims to minimize the total relevant costs e.g. ordering cost, carrying cost, quality loss cost and preservation cost. Also, this paper investigates the relationship between cost, temperature and quality loss. A mathematical model representing the inventory system is established and a numerical example is presented to demonstrate the benefit of the model compared to the existing models in literature. Refereed/Peer-reviewed

This paper presents a categorization of existing studies in the area of inventory models for deteriorating items from the perspective of supply chain management (SCM). It aims to fill the gap of literature studies in this field. Existing literature studies mainly focus on deteriorating issues sueh as the deterioration type of inventories or characteristics of demand. This paper however, emphasizes on assessment the literature from the SCM view. In this context, three effects of the deterioration on inventory, namely, quantity, quality and value degradation of inventoried items across supply chain arc discussed. Then, a new framework is introduced to map studies in this field and some potential gaps for future research are identified. Refereed/Peer-reviewed