Simulation based approach for inventory management of packaged milk at an unorganized Indian retailer: A case study

DOI

10.2991/978-94-6463-914-8_5How to use a DOI?

Keywords

Inventory management; Genetic Algorithm (GA); fixed- order policy; based-stock policy; simulation-based optimization; perish- able goods; supply chain

Abstract

Managing inventory for perishable goods such as milk is a complex task, particularly for small unorganized retailers who handle multiple products and lack the resources to closely monitor each item or employ costly optimization tools. Such retailers typically relay on simple thumb rules or fixed-order policies to manage stock. This study develops a Discrete-Event Simulation (DES) model to replicate the daily operations of such a retailer managing multiple milk SKUs under demand uncertainty and product perishability. A Genetic Algorithm (GA) is then applied to optimize the parameters of a base-stock policy, aiming to improve ordering decisions. Results indicate that the GA-optimized policy yields marginally higher profitability and reduced lost sales compared to the traditional fixed-order approach. While the improvement is statistically significant, its magnitude remains modest, suggesting that the simple heuristics used by small retailers are relatively effective and continue to be practical for real-world supply chain operations.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Nishit Satish Mehta
AU  - Anand Abraham
AU  - K. Nageswara Reddy
PY  - 2025
DA  - 2025/12/24
TI  - Simulation based approach for inventory management of packaged milk at an unorganized Indian retailer: A case study
BT  - Proceedings of the International Conference on Operations & Supply Chain Management 2025 (ICOSCM 2025)
PB  - Atlantis Press
SP  - 48
EP  - 60
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-914-8_5
DO  - 10.2991/978-94-6463-914-8_5
ID  - Mehta2025
ER  -