Production lot size models for perishable seasonal products

Abstract

Seasonal items like fruits, fish, winter cosmetics, fashion apparel, etc. generally exhibits different demand patterns at various times during the season. Production and inventory planning must reflect this property for cost effectiveness and optimization of resources. This paper presents two production-inventory models for perishable seasonal products that minimize total inventory costs. The models obtains optimal production run time and optimal production quantity for cases when the production rate is constant and when it is allowed to vary with demand. The products are assumed to deteriorate at an exponential rate and demand for them follows a three-phase ramp type pattern during the season. Numerical examples and sensitivity analysis are carried out. Production run time and production quantity obtained by the model were found to be independent of cost parameters. The variable production rate strategy was also found to give lower inventory costs and production quantity than the constant production rate strategy