Dear All,
We are pleased to invite you to the IEOR Seminar by Prof. Achal Goyal, IIM Udaipur. The details are given below.
Title: Approximation Algorithms for Perishable Inventory Systems with FIFO Issuance Policy and Age-Sensitive Customers (joint work with Prof. Amar Sapra)
Speaker: Prof. Achal Goyal, IIM Udaipur
Date & time: 9:30AM, 24 March 2026
Venue: IEOR 211 (Seminar Room), 2nd floor, IEOR building
Abstract: A key challenge faced by online grocery retailers is that while issuing inventory in a first-in, first-out (FIFO) manner minimizes waste, it may upset a few customers since the delivered unit may not always be fresh. Hence, it may be beneficial to voluntarily reduce a product's lifetime. With this motivation, we develop a model in which the retailer first decides an operative lifetime for a perishable product and then decides replenishment quantity using a periodic review model over a finite horizon such that excess demand is lost. We model customers' sensitivity to age using a goodwill cost, which increases as the age of the delivered unit increases. The model is challenging to analyze since it lacks structural properties such as concavity. Accordingly, we focus on developing high-quality approximate solutions. For a given operative lifetime, we develop a computationally efficient algorithm to determine replenishment policy that admits a worst-case performance guarantee. Our worst-case analysis also leads to an improvement in the best-known guarantee for the special case when customers are not age sensitive. In another key result, we develop a novel inventory matching scheme to identify when profit is monotonic in the operating lifetime. Furthermore, using an auxiliary model, in which units age but do not perish, we develop bounds on the profit of the model with finite operative lifetime. Lastly, we propose a heuristic to determine near-optimal operative lifetime and replenishment quantities and show that its average optimality gap is less than 1%.
Host: K.S. Mallikarjuna Rao