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Modelling the trade-off between service level and waste of perishable goods at food retailers

Joore, E.R.M. (2021) Modelling the trade-off between service level and waste of perishable goods at food retailers.

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Abstract:Food retailers try their best to reduce the food waste resulting from outdating in supermarkets. However, inventory management systems are generally not compatible for perishable goods since the expected waste is not provided in the traditional (R,s,nQ)-policy. Furthermore, it is unknown whether a higher target service level increases the waste of certain perishable goods. To model the waste (relative outdating) of all perishable goods, we performed a simulation, two approximations and linear regression on data of a supermarket client of Slimstock, a Dutch inventory optimization company. Three food retail characteristics were specifically taken into account, namely non-stationary demand, presentation stock, and mixed FIFO-LIFO demand. The results showed that including these characteristics in the model is vital since they have a big effect on the expected relative outdating. Furthermore, the results showed a low performance for highly monthly or weekly seasonal SKUs and 99% target service levels. The model performed well for all other SKUs and settings. The results are promising and future research is needed to ensure that SKU characteristics and model parameters can easily be modeled to give a good prediction of the expected relative outdating.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:54 computer science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/86238
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