ANALYSIS OF INVENTORY MANAGEMENT MODELS FOR PERISHABLE AND NON-PERISHABLE ITEMS

Abstract

Supply chain management is one of the key functions for each of the companies. An effective and efficient supply chain management is very important for the overall success of a company. Inventory management is a key part of supply chain of any business. There are various kinds of inventories like raw material inventory, store inventory, warehouse inventory and retail inventory etc. Inventory consists of two categories of items which are perishable items and non- perishable items. For non- perishable items many inventory models like LIFO, FIFO, ABC analysis, EOQ model, FSN model etc are used but all these models focus on the quantity aspect only while for perishable items focus is on quality as well as quantity and concept of shelf life is used in inventory models of perishable items. Shelf life is commonly associated with perishable items like food and drugs since their usable period tends to be shorter, and methods like FEFO are employed for their inventory management. Such approach however, is not applied non-perishable items due to relatively longer shelf lives. But, if similar criteria is applied even for non -perishable maintenance items like bearings, fasteners, gears, welding rods, couplings, it can be an effective approach of their inventory management., leading to higher operational efficiencies for the whole system. The purpose of this study is to analyze inventory models of perishable and non- perishable items and identify the requirement of introducing quality concepts such as shelf life in non- perishable items inventory models also and develop a new inventory model based on shelf life for such items. In order to identify the requirement of introducing shelf life based model the efforts in this research were focused primarily on two regions which were store inventory and consumer buying behaviour differences in case of perishable and non-perishable items and based on this analysis a new inventory model was developed.