Impact of Variable Deterioration Rate of Perishable Food Items on Multi-Echelon Distribution Chains

Abstract

Customer satisfaction is the backbone of any business entity and supply chain optimization plays a vital role in customer satisfaction efforts. Supply chain inventory control is one of the scientific supply chain optimization methods for determining proper inventory levels at different stages or echelons of the supply chain to meet the requirements of the customers. The intention is to supply right type of material at exact time in appropriate quantities and at competitive rates. Supply chain inventory costs consist of costs to store, track and insure materials. Inventories that mishandled create substantial financial problems for a business, whether the mismanagement results in an inventory accumulation or an inventory shortage. Therefore, an examination of the right quantities to be kept in stock to meet the requirements, the strategic location, storage facilities and recordings of the goods or items should be done systematically such that the desired degree of service can be provided at competitive prices or at minimum ultimate cost. Major objective of inventory control in a multi echelon supply chain is to optimize inventory cost elements like transportation cost, carrying cost, holding cost and all other inventory related costs at all supply chain stages with an elevated service level at the end customer point. The supply chain inventory control becomes tough when the handling material is a perishable one as its deterioration rate is variable rather than constant. This article provides the study results of the deterioration rate of a perishable edible inventory at different selected environmental conditions. The focus of this article is to introduce a mathematical equation for the deterioration rate of the selected perishable inventory which is inevitable for the formulation of inventory models for its supply chain echelons.