Improving perishable product inventory management using goal programming

The multiple objectives of perishable product inventory management are examined in this paper. These objectives include: (1) satisfying demand by carrying sufficient inventories, (2) holding down inventory carrying costs, (3) keeping the amount of product spoilage (outdating) at an acceptable level, and (4) maintaining quality by using the product while it is still fresh, and (5) keeping the cost of rotation low. Some of the above objectives are in conflict. Thus, certain redistribution policies may help attain one or more of these objectives to a greater extent. Redistribution involves the transfer of the product from outlets where demand is low to outlets where demand is high. A goal programming model for solving redistribution problems is presented. An example is provided and sensitivity analysis is performed in order to determine when redistribution is advantageous. Applicability of the model is discussed.     

Price determinants of bred heifers: Do reputations matter?

Replacement brood cows are among the most significant investments for cow-calf operations, thus crucial to profitability. Many cow-calf producers find it cost effective to purchase replacements from a reliable replacement heifer seller, though by doing so they increase risk of reproductive inefficiency due to unknown characteristics of the heifers. When important information about a product is missing to buyers, a seller can build a reputation over time that acts as signal for quality. Previous work has explored reputation effects in feeder cattle markets, but to our knowledge we are the first to explore reputation effects in bred replacement cattle markets. Using data from an annual replacement heifer sale, we analyze the values of heifer characteristics and test for premiums from reputation development. After controlling for reproductive practices, breed, and other characteristics, we find reputation does not play the role that Shapiro theorized. In this sale, the lot order is strategically chosen and may indicate bred heifer quality to buyers, replacing the need for reputation as a signal. This study highlights the importance of quality signals and regional preferences in bred replacement cattle marketing and lays the empirical groundwork for future studies to test Shapiro's theory.