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Optimal delivery and replenishment policies for perishable products considering lost sale cost: an efficient hybrid algorithm

In today’s competitive global market, improving the quality of customer service and waste reduction are two important factors to maximise the profits of a system. These goals can be achieved throughout well-managed logistical operations such as proper inventory management and timely delivery of perishable items to customers. This paper presents an integrated mathematical model that schedules replenishment of a perishable product to determine delivery routes, truck loads and inventory levels, where the vehicle arrival time has a direct impact on the quantity of the product delivered to customers. Given the NP-hard nature of the problem, finding optimum or near optimum solutions in polynomial time is challenging, therefore a hybrid algorithm based on a linear programming model and a simulated annealing algorithm is developed to solve the problem efficiently. The proposed method achieves a solution near-optimal solution in an efficient computational time. Finally, an analysis is carried out to verify the effectiveness of the algorithm.