Discrete-event simulation for effective perishable inventory management: a review

Perishable products are associated with a limited shelf-life, and their efficient management often requires close matching of supply with demand. Due to the inherent uncertainty in supply chains, determining stock reordering points and issuance policies is challenging. Tools and techniques from Operations Research/Management Science (OR/MS) support decision-makers in making well-informed decisions related to perishable inventory management. Among the plethora of OR/MS methods, discrete-event simulation (DES) is well suited for studying inventory systems, as this typically models products moving in and out of storage within a stochastic supply chain environment, and in the case of perishable goods, enabling age tracking of products. This paper presents a literature review of DES applied to perishable inventory management. Our base set of literature consists of 25 papers retrieved through searches of scholarly databases. Notably, our review highlights that fields such as the pharmaceutical, organ donation, and floral and horticultural supply chains are relatively underexplored. Furthermore, while most modeling studies consider uncertainty on the demand side, uncertainties related to lead time, yield, or product lifetime have not been modeled to a great extent. Our review is a key source of literature for researchers and practitioners on the current state-of-the-art in DES modeling for perishable inventory; it identifies research gaps and provides directions for future research.