In this paper we study the single-item single-stocking location non-stationary stochastic lot sizing problem for a perishable product. We consider fixed and proportional ordering cost, holding cost, and penalty cost. The item features a limited shelf life, therefore we also take into account a variable cost of disposal. We derive exact analytical expressions to determine the expected value of the inventory of different ages. We also discuss a good approximation for the case in which the shelf-life is limited. To tackle this problem we introduce two new heuristics that extend Silver's heuristic and compare them to an optimal Stochastic Dynamic Programming (SDP) policy in the context of a numerical study. Our results demonstrate the effectiveness of our approach.
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Highlights• Mixed integer linear programming model for offshore wind farm maintenance• Deterministic scenario based model supporting decisions on vessel fleet composition• Derives a practical decision rule to schedule maintenance operations• Illustrates the underestimation of the cost by a complete information model• Applies the procedure to a practical case
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