A supply chain network design model for random-lifetime products

Design of a distribution network for perishable inventory is different and more challenging than for non-perishables. The complexity of design for perishable inventory is due to the limited lifetime of these products that restricts their duration and condition of storage. Further, under some circumstances such as unusual weather condition or malfunction of transportation and storage facilities, the expected lifetime of products may fluctuate and make the situations more complicated. This study, therefore, develops a model for network design of perishable items, and takes into account the uncertainty of products lifetime. Since many uncertain parameters are difficult to be defined by known probability distribution functions, the developed model of this study deals with the uncertainty of lifetime by defining worst-case scenarios. The model determines the configuration and inventory control policy of the network concerning the defined scenarios. A Lagrangian relaxation-based heuristic algorithm is developed to solve the model. © 2016 Chinese Institute of Industrial Engineers.