Effective Inventory Control Under Very Large Unknown Deterioration Rate and Volatile, Almost Unpredictable Customer Demand

We consider a periodically reviewed perishable Supply Chain (SC) whose dynamics shows the following elements of complexity: the goods are affected by a very large, uncertain deterioration factor (DF), the customer demand is highly unpredictable and volatile. The problem we face is to define an effective Inventory Replenishment Policy (IRP) conciliating the conflicting requirements of maximizing the satisfied customer demand and containing the Bullwhip Effect (BE). The method we propose is situated in the general framework of min-max Model Predictive Control (MPC) applied to SC management. We exploit the flexibility and generality of min-max MPC to define a specifically tailored method to address the peculiarity of the current, extremely complex issue. Especially, we demonstrate the advantages of using a short prediction horizon and point-wise constraints on the IRP