Assessing the impact of perishability and the use of time temperature technologies on inventory management

This paper investigates the impact of product perishability on the known (r,Q) inventory review policy and the benefits of using Time Temperature integrator technology (TTI) on inventory management. We first formulate an (r,Q) inventory model for perishables having a fixed lifetime. Then, we derive the operating costs of the inventory system when a TTI technology is used. We consider here two types of TTI technology: TTI type 1 technology which enables to monitor products' freshness and alert when products are no more fresh and TTI type 2 technology which gives an information on products' remaining shelf lives. We develop a numerical analysis to illustrate the advantages of using the proposed policy without TTI compared to the classical (r,Q) system which ignores the perishability of products. Finally, we study the cost improvement achieved when a TTI technology is deployed. (C) 2010 Elsevier B.V. All rights reserved.