Optimal Lot Sizing for Perishable Products under Strict Carbon Cap Policy considering Stochastic Demand and Energy Usage cost

Abstract

In this paper, we have considered stochastic demand for perishable items under strict carbon cap policy and energy usage. Perishable foods like meat, poultry, fish, dairy products etc. which are likely to spoil if not kept refrigerated. So that we related to the energy usage for maintaining perishable items at certain climate conditions where the inventory is stocked. Due to the nature of perishable product starts to decay at certain time, so that vendor provide a discount for the product in demand rate. We model the system into two stage, On first stage holds fresh items as non-discount period and second stage as older items as discount period nearer to expiration. A mathematical model is developed to determine the optimal order quantity, reorder point and number of shipments in a two-echelon supply chain considering partial backorders. The objective is to minimize the total expected supply chain cost while satisfying the carbon emission constraint. A numerical example is given to illustrate the solution procedure.