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An integrated production planning and inventory management problem for a perishable product: optimization and Monte Carlo simulation as a tool for planning in scenarios with uncertain demands

Author

Listed:
  • Jeferson Auto da Cruz

    (Federal Institute of São Paulo (IFSP)
    Federal University of São Paulo (UNIFESP)
    Aeronautics Institute of Technology (ITA))

  • Luiz Leduino de Salles-Neto

    (Federal University of São Paulo (UNIFESP))

  • Cleder Marcos Schenekemberg

    (Federal University of São Paulo (UNIFESP)
    Aeronautics Institute of Technology (ITA))

Abstract

This paper addresses a novel problem inspired by a practical situation faced by a Brazilian dairy company, which presents the integration of production and a two-level storage inventory control. In the supply chain (SC) analyzed, multiple production plants, warehouses, and distribution centers are considered. The problem also involves a set of constraints related to logistical capabilities and conditions of material flow throughout the SC. We developed a mathematical model and a Monte Carlo Simulation routine that aims to assist managers in establishing a production and inventory management plan for a perishable product, considering a stochastic and non-stationary demand. A numerical illustration of the results obtained by the mathematical model and a case study are carried out on the consideration of a First-Expired, First-Out inventory management policy. Results demonstrate that the proposed method allows the analysis of safety stock and the achievement of desired service levels while promoting a reduced rate of food waste over the considered planning horizon.

Suggested Citation

  • Jeferson Auto da Cruz & Luiz Leduino de Salles-Neto & Cleder Marcos Schenekemberg, 2024. "An integrated production planning and inventory management problem for a perishable product: optimization and Monte Carlo simulation as a tool for planning in scenarios with uncertain demands," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 32(2), pages 263-303, July.
    • Handle: RePEc:spr:topjnl:v:32:y:2024:i:2:d:10.1007_s11750-024-00667-x
    DOI: 10.1007/s11750-024-00667-x
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    References listed on IDEAS

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