The Notion of Internal Dynamics and Its Impact on Modeling and Controlling Supply Chains With Goods Characterized by Uncertain Perishability Rate

Abstract

For a deeper insight on the inventory control problem of periodically reviewed perishable supply chains (SCs) with perishable goods, we here introduce the notion of internal dynamics (ID) and propose a min-max model predictive control (MPC) of the inventory level based on this notion. The acronym ID denotes the actual scheduling of the usual management operations (OPs) executed inside each review period. We show that the information carried by the ID is fundamental to define an efficient inventory control policy (ICP). The notion of ID is particularly important in the case of SCs characterized by elements of complexity like: 1) perishable goods with large, not exactly known deterioration rate; 2) the length of the review period is such as to produce a high spoilage within it; 3) an uncertain future customer demand with oscillations that are not statistically modelable. Exploiting the notion of ID, we define an inventory model properly capturing these features. This model encompasses as particular cases other SC models proposed in the literature. We also define a coherent two criteria-based evaluation of the bullwhip effect (BE). We also provide key managerial insights for a proper scheduling of all the OPs inside each review period. The reported numerical simulations show the effectiveness of our approach.