Inventory Control of Life-limited Products

Abstract

Inventory control is the one of the important performance goals of any manufacturing or service organization. Models related to inventory control, of products having limited life-time, have been proposed in literature. Most of these models assume cases of instantaneous replenishment. However, in any manufacturing process, positive lead-time is common, and a formal analysis of such cases under realistic conditions is necessary.

In this paper, a scheduling heuristic to address the problem of inventory control of life-limited or perishable products has been proposed. This heuristic has been adapted from the scheduling rules of Process Flow Scheduling literature, and modified, especially, for production scheduling issues in the pharmaceutical industry. Two simulation models, each representing a 'make-to-stock' and 'make-to-order' system for a generic process, have been constructed. Sensitivity analysis study of the proposed method for various factors such as product quality yield, variability in the setup durations, variability in processing duration, etc. is conducted by experimental design. Results of this study will serve as an excellent guideline for industries facing the problem of perishability of raw materials and intermediate products.