Inventory management in the food distribution: Re-order policy optimization

This paper analyses the inventory management in the food distribution centres and proposes a solution to cope with the abrupt and planned variations in the upstream demand. Through the mathematical optimisation techniques, total inventory costs are minimised, and customers' service level is maximised. The model is applied to the main distribution centre of Condis supermarkets in Barcelona. The preliminary results show how the model can optimally determine the safety and cycle stock while minimising the overstock situation in different scenarios of demand variabilities. The model is also capable of eliminating the stockout situation and increasing the inventory service level.