Using system simulation to search for the optimal multi-ordering policy for perishable goods

Y.C. Huang, X.Y. Chang, Y.A. Ding

Abstract

This paper explores the possibility that perishable goods can be ordered several times in a single period after considering the cost of Marginal contribution, Marginal loss, Shortage, and Purchasing under stochastic demand. In order to determine the optimal ordering quantity to improve the traditional newsvendor and maximize the total expected profits, and then sensitivity analysis is taken to realize the influence of the parameters on total expected profits and decision variables respectively. In addition, this paper designed a multi-order computerized system with Monte Carlo method to solve the optimal solution under stochastic demand. Based on numerical examples, this paper verified the feasibility and efficiency of the proposed model. Finally, several specific conclusions are drawn for practical applications and future studies.


Keywords

Perishable goods; Single-period; Multi-ordering; Newsvendor model; Monte Carlo method

Full Text:

PDF

References

Azoury, K.S., Miller, B.L. (1984). A comparison of the optimal ordering levels of bayesian and non-bayesian inventory models, Management Science, 30(8), 993-1003. https://doi.org/10.1287/mnsc.30.8.993

Alfares, H.K., Elmorra, H.H. (2005). The distribution-free newsboy problem: extensions to the shortage penalty case, International Journal of Production Economics, 93-94(8), 465-477. https://doi.org/10.1016/j.ijpe.2004.06.043

Chung, C.S., Flynn, J. (2001). A newsboy problem with reactive production, Computers & Operations Research, 28(8), 751-765. https://doi.org/10.1016/S0305-0548(00)00006-X

Chun, Y.H. (2003). Optimal pricing and ordering policies for perishable commodities, European Journal of Operational Research, 144(1), 68-82. https://doi.org/10.1016/S0377-2217(01)00351-4

Chen, L.H., Chen, Y.C. (2009). A newsboy problem with a simple reservation arrangement. Computers & Industrial Engineering, 56(1), 157-160. https://doi.org/10.1016/j.cie.2008.04.010

Dian, J.R. (1990). A high-low search algorithm for a newsboy problem with delayed information feedback. Operations Research, 38(5), 838-846. https://doi.org/10.1287/opre.38.5.838

Dye, C.Y., Ouyang, L.Y. (2005). An EOQ model for perishable items under stock-dependent selling rate and time-dependent partial backlogging. European Journal of Operational Research, 163(3), 776-783. https://doi.org/10.1016/j.ejor.2003.09.027

Fujiwara, O., Soewandi, H., Sedarage, D. (1997). An optimal ordering and issuing policy for a two-stage inventory system for perishable products. European Journal of Operational Research, 99(2), 412-424. https://doi.org/10.1016/S0377-2217(95)00365-7

Gallego, G., Moon, I. (1993). The distribution free newsboy problem: review and extensions. Journal of the Operational Research Society, 44(8), 825-834. https://doi.org/10.1057/jors.1993.141

Khouja, M. (1999). The single-period (news-vendor) problem: literature review and suggestions for future research. Omega, 27(5), 537-553. https://doi.org/10.1016/S0305-0483(99)00017-1

Khouja, M.J. (2000). Optimal ordering, discounting, and pricing in the single-period problem. International Journal of Production Economics, 65(2), 201-216. https://doi.org/10.1016/S0925-5273(99)00027-4

Lau, H., Lau, H. (1998). Decision models for single-period products with two ordering opportunities. International Journal of Production Economics, 55(1), 57-70. https://doi.org/10.1016/S0925-5273(98)00040-1

Padmanabhan, G., Vrat, P. (1995). EOQ models for perishable items under stock dependent selling rate. European Journal of Operational Research, 86(2), 281-292. https://doi.org/10.1016/0377-2217(94)00103-J

Pando, V., Luis, A.S.J., Juan, G.L., Sicilia, J. (2013). A newsboy problem with an emergency order under a general backorder rate function. Omega, 41(6), 1020-1028. https://doi.org/10.1016/j.omega.2013.01.003

Zheng, M., Wu, K., Shu, Y. (2016). Newsvendor problems with demand forecast updating and supply constraints. Computers & Operations Research, 67, 193-206. https://doi.org/10.1016/j.cor.2015.10.007

Abstract Views

965
Metrics Loading ...

Metrics powered by PLOS ALM




This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives- 4.0 International License 

Universitat Politècnica de València

e-ISSN: 2340-4876     ISSN: 2340-5317   https://doi.org/10.4995/ijpme