Inventory Management for Perishable Two-Echelon Supply Chains

Managing perishable inventory in two-echelon supply chains is complex and requires efficient inventory management systems to preserve product quality, reduce product waste, and, subsequently, costs. This study introduces a novel Economic Order Quantity (EOQ) model for deteriorating items that optimizes the replenishment policy. The model incorporates time- and environment-dependent deterioration functions to address microbial decomposition and oxidation losses in a biomass-to-biofuel supply chain. Mathematical modeling and numerical analysis integrate microbial growth kinetics, transportation times, and cooling costs. The findings reveal that deterioration significantly impacts inventory levels and supply chain costs, with faster rates leading to more losses and expenses. The proposed model extends classical EOQ methods by dynamically adjusting order quantities and optimizing storage conditions. This study offers valuable insights to enhance supply chain resilience and sustainability.