Discrete Lot-Sizing and Scheduling Including Deterioration and Perishability Constraints

Constraints on the lifetime of items force organizations to carefully plan their production in cooperation with their supply chain partners up- and downstream along the chain. This is important because waiting times due to suboptimal planning give rise to increasing lead times and, consequently, to deterioration and thus decreasing quality of items so that, in the worst case, they cannot be used. Increased costs, delivery delays, quality decreases and unsatisfied customers are negative effects that can be avoided by accounting for product depreciation in the production process. We highlight the importance of including deterioration and perishability in planning decisions and present well-known discrete lot-sizing and scheduling models extended in this regard. The effects on plans derived by these models including depreciation is shown using a numerical example.