From the course: Supply Chain and Operations Management Tips

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Optimize your perishable inventory

Optimize your perishable inventory

From the course: Supply Chain and Operations Management Tips

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Optimize your perishable inventory

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- Everyone knows that in business, time is money. And when you're selling perishable products and services, time can be really expensive. Let's look at some examples of perishable inventory and then I'll demonstrate how to use an equation called the news vendor solution to maximize your profits. When people hear the term perishable, they often think of food products, dairy, fresh fruits and vegetables are all perishable because they can spoil relatively quickly. But for supply chain professionals, any product or service that loses its value over time is perishable. Rubber products lose their elasticity, fashion items and electronics become outdated, even hotel nights and airplane seats lose their value if they're not sold. It turns out many of the products and services in our supply chains are perishable. So let's look at a way to minimize our losses from the effects of time. A classic example of perishable inventory is the problem facing a newspaper vendor. In the morning, she needs…

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