Optimal continuous review policies for single-manufacturer multi-retailer cold chains with stochastic demand (original) (raw)

Abstract

This paper investigates optimal continuous review policies for a cold chain involving a single manufacturer supplying multiple retailers, each facing stochastic demand. The manufacturer processes a food item at a set rate and replenishment time, distributing it to each retailer operating under a (Q, r) inventory policy. Quality degradation throughout the cold chain depends on both temperature and time, assessed through the non-Arrhenius model and Global Stability Index method, which considers multiple quality indicators. An iterative algorithm is presented to determine each retailer’s optimal (Q, r) policy by minimizing the expected total costs, including costs for quality degradation, cooling, and carbon emissions. The manufacturer's key decision variables are the production rate and replenishment interval, while the retailers’ decisions focus on order quantity and reorder level. A notable finding is that when the manufacturer sets its policies before the retailers, the storage temperatures maintained by both the manufacturer and retailers significantly impact the retailers’ optimal decisions due to the effects of quality degradation on both ends of the supply chain.

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Acknowledgements

The authors thank the Natural Sciences and Engineering Research Council of Canada (NSERC) for supporting this research

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Authors and Affiliations

1. School of Management, Wuhan College, 333 Huangjiahu Road, Jiangxia District, Wuhan, 430212, Hubei, China
   G. Chen
2. Department of Mechanical, Industrial, and Mechatronics Engineering, Toronto Metropolitan University, 350 Victoria St., Toronto, ON, M5B 2K3, Canada
   M. I. M. Wahab & L. Fang

Authors

1. G. Chen
2. M. I. M. Wahab
3. L. Fang

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Correspondence toM. I. M. Wahab.

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Chen, G., Wahab, M.I.M. & Fang, L. Optimal continuous review policies for single-manufacturer multi-retailer cold chains with stochastic demand.Oper Res Int J 26, 24 (2026). https://doi.org/10.1007/s12351-025-01016-x

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• Received: 16 January 2025
• Revised: 27 November 2025
• Accepted: 19 December 2025
• Published: 02 February 2026
• Version of record: 02 February 2026
• DOI: https://doi.org/10.1007/s12351-025-01016-x

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