CONTINGENCY PRODUCTION-INVENTORY CONTROL POLICY FOR CAPACITY DISRUPTIONS IN THE RETAIL SUPPLY CHAIN WITH PERISHABLE PRODUCTS
Abstract Interrelations of product perishability and supply chain resilience are studied. The major distinguishing features in a supply chain with perishable products that may affect the resilience are the risks of goods write-off. Constraints on product perishability typically result in safety stock reductions and transportation frequency increase. Consideration of the production capacity disruption risks may lead to safety stock increase. The developed simulation model was run with data of a fast moving consumer goods company and revealed novel managerial insights and practical recommendations on inventory, on-time delivery and service level control. More specifically, the evidence for adjustment of production and inventory control policies during the disruption time is provided. Otherwise the delayed and backlog orders are accumulated over the disruption time. They transit as residues into the post-disruption period and do not allow full performance and operation dynamics stabilization even after full capacity recovery. An example of such a contingency production-inventory control policy is presented.